After posting losses in previous two quarters, crisis-hit United Bank of India on Monday reported a 15-fold jump in net profit at Rs 469.37 crore for the quarter ended March 31, 2014, on the back of a strong bad loan recovery, coupled with a decent growth in net interest income.
The Kolkata-headquartered bank made a reduction in its gross non-performing assets (NPAs) of R1,427 crore during the fourth quarter last fiscal. The bank’s gross NPAs to gross advances during the third quarter of FY14 had jumped to 10.82% to R8,545.50 crore.
“We are on the course of recovery. The major achievement during the fourth quarter last fiscal was a robust recovery. Our net interest income also saw more than 20% year-on-year growth,” United Bank of India executive director Sanjay Arya told reporters after announcing the results.
The state-run lender’s total recovery of bad loans reached a record high of R2,592.13 crore for the fourth quarter of FY14. Cash recovery during the period stood at R645.41 crore, while upgradation of NPAs to standard assets reached R1,488 crore. Fresh slippages of the bank during the March quarter last fiscal stood at R1,164.64 crore.
The bank’s total income during the March quarter of 2013-14 soared to R3,073.78 crore, posting a 14.3% y-o-y rise.
Operating profit during the period under review rose to R542.95 crore from R510. 73 crore for the same period a year ago, mainly due to a sharp rise in its net interest income. Net interest income of the bank increased to R698 crore for the March quarter last fiscal from R564 crore for the corresponding period of previous fiscal, registering a 24% y-o-y growth.
Total provisions during Q4 of FY14 fell to R266.70 crore from R758.80 crore for the same period of FY13. “Our NPA provisioning for the fourth quarter of FY13 was R338 crore, while the bank received R35 crore write-back during the same period of FY14,” said Arya. Gross NPA ratio stood at 10.74%, compared with 10.82% during the December quarter. Net NPA ratio during the period stood at 7.18% against 7.44% during the third quarter last fiscal.