Monday, 30th October 2017

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UBI, Uco Bank dogged by bad loans

Both the Calcutta-based banks received capital infusion from the central government during the quarter

By A Staff Reporter in Calcutta
  • Published 10.02.19, 12:42 AM
  • Updated 10.02.19, 12:42 AM
  • a min read
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For Uco Bank, the rise in gross NPA during the quarter was sharper at Rs 31,121.79 crore against Rs 25,382.40 crore in the year-ago period. (Shutterstock)

Two city-based public sector banks — United Bank of India and Uco Bank — saw a rise in non-performing assets for the quarter ended December 31, 2018. Faced with fresh slippages and rise in bad loan provisions, both lenders posted losses during the quarter.

The gross non-performing assets of United Bank increased to Rs 14,737.61 crore during the quarter against Rs 13,720.69 crore in the corresponding period of the previous year. In percentage terms, the gross NPA during the quarter was 21.27 per cent of the advances against 20.10 per cent a year ago. However, sequentially, the gross NPA ratio was lower than 22.69 per cent in the second quarter of 2018-19.

The bank made a provision of Rs 1,801.51 crore for NPAs during the quarter. Its losses during the quarter were Rs 1139.25 crore, higher than Rs 637.52 crore in the year-ago period.

For Uco Bank, the rise in gross NPA during the quarter was sharper at Rs 31,121.79 crore against Rs 25,382.40 crore in the year-ago period. In percentage terms, the gross NPA during the quarter was 27.39 per cent compared with 20.64 per cent in the year-ago period.

The bank made a provision of Rs 2,243.85 crore for non-performing assets compared with Rs 1,682.40 crore in the year-ago period. Uco Bank’s loss during the quarter was Rs 998.74 crore compared with Rs 1,016.43 crore a year ago.

Rising promoter holding

Both United Bank and Uco Bank received capital infusion from the central government during the quarter. But the move is set to increase the Centre’s stake in the banks, which is already high, leading to concerns over maintaining the minimum public shareholding requirement.

While the government held 92.25 per cent at the end of the October-December quarter in United Bank, its stake in Uco Bank was 90.80 per cent. Sebi norms mandate a 25 per cent public shareholding. The banks have time till October 2020 to comply with the requirement.