United Bank net up 47% at Rs 65.89 crore

Aug 15 2014, 01:14 IST
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SummaryState-run United Bank of India on Thursday reported a 47.31% year-on-year increase in its net profit to R65.89 crore for the quarter ended June

State-run United Bank of India on Thursday reported a 47.31% year-on-year increase in its net profit to R65.89 crore for the quarter ended June, from R44.73 crore for the same period a year ago, on the back of lower total provisions due to a dip in provisions for non-performing assets.

The bank said it was able to reduce its gross NPAs to R7,097.44 crore, from R7,118.01 crore at the end of fourth quarter last fiscal. During the June quarter, the lender’s cash recovery stood at R340 crore, while upgradation of NPAs to standard assets reached R626 crore.

The state-run lender’s gross NPAs as a percentage of gross advances, however, increased marginally to 10.49% during the first quarter of FY15 from 10.47% in the last quarter , as the bank’s total advances fell.

Its gross NPA ratio stood at 5.59%. During the period under review, the bank’s total advances came down to R676.40 crore from R715.34 crore for the same period last fiscal. “This is because the bank can now only lend to the retail sector. We have also taken a conscious decision to focus on lending to the low-risk segment,” executive director Deepak Narang told reporters after announcing the results.

United Bank still has some lending restrictions, imposed by the Reserve Bank of India (RBI). The bank’s ability to lend is now linked with cash recoveries from the non-performing loans. The lender’s operating

profit for the June quarter posted more than 4% y-o-y decrease at R574.19 crore. Net interest income for the period increased to R596.45 crore from R587.02 crore for the same period a year ago, registering a marginal 1.6% rise.

The bank’s total income increased to R3004.26 crore with a y-o-y growth of 4.72%.

During the June quarter, total provisions came down to R425.48 crore from R506.08 crore for the corresponding period last fiscal, a decline of about 16% y-o-y. Reduction in the total provisions was mainly due to a significant fall in provisions for NPAs. During the period, the bank’s NPA provisions fell to R224.79 crore from R305.17 crore for the year-ago period on the back of recovery and upgradation of stressed assets.

“We are happy to bring the bank to the path of recovery. We have to stabilise the process,” executive director Sanjay Arya said. During the June quarter, fresh slippages stood at R1,193 crore against R1,200 crore for the same period last fiscal.

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