The Telegraph
Tuesday , May 6 , 2014
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UBI effort bears fruit

Deepak Narang in Calcutta on Monday. Picture by Kishor Roy Chowdhury

Calcutta, May 5: The United Bank of India has reported a net profit of Rs 469.37 crore in the fourth quarter on the back of a strong recovery drive following huge losses suffered in the previous quarter.

The public sector lender had registered a loss of Rs 1,238.08 crore in the third quarter and a profit of Rs 31.18 crore in the fourth quarter a year ago.

Net interest income during the quarter increased 23.87 per cent to Rs 698.35 crore. The bank was able to significantly lower its provisions with improvement in the asset quality to Rs 73.59 crore against Rs 479.54 crore over the same period a year ago. This helped the bank to improve its bottomline.

Gross non performing assets (NPAs) of the bank decreased to Rs 7,118.01 crore during the fourth quarter from Rs 8,545.50 crore a year ago. Gross NPA in the corresponding fourth quarter a year ago was Rs 2,963.82 crore. Gross NPA stood at 10.47 per cent of the advances during the quarter.

“We have been able to turnaround this quarter on the back of a robust recovery drive after the losses of the earlier quarter,” executive director Deepak Narang today said.

He said the bank was able to lower its NPAs by Rs 2,592.13 crore in the quarter, while cash recovery was Rs 645.41 crore. With a fresh slippage of Rs 1,164.64 crore, net NPA of the bank stood at Rs 7,118.01 crore during the quarter.

Even as the bank improved its profitability during the fourth quarter, for the fiscal its bottomline remained in the red. The bank suffered a loss of Rs 1,213.45 crore against a profit of Rs 391.90 crore in 2012-13.

Capital adequacy under the Basel III norms improved during the quarter to 9.81 per cent with a tier 1 ratio (the bank’s core equity capital to risk weighted assets) of 6.54 per cent. This had declined to 5.6 per cent in the third quarter ended December, which was below the trigger level of 6.125 per cent, leading to rating agencies raising concerns.

Following the improved result, the UBI will approach the RBI to lift the Rs 10-crore lending cap imposed in November.