UBI profit rises to Rs 124 crore in Sep quarter on lower dud loans

State-owned United Bank of India reported a net profit of Rs 123.88 crore in the quarter ended September 30, on the back of substantially lower dud loans, leading to lower provisioning requirement.

The Kolkata-headquartered bank had posted a net loss of Rs 883.17 crore in the July-September period of 2018-19. The lender's total income rose to Rs 3,013.74 crore in the September 2019 quarter, compared with Rs 2,600.47 crore earned in the corresponding period of the previous financial year, the bank said in a regulatory filing on Wednesday.

In the quarter under review, the lender reported slippages of around Rs 1,000 crore, out of which Rs 800 crore was from corporate accounts, MD and CEO Ashok Pradhan told reporters in Kolkata.

"The bank has done significantly well during the second quarter. We have registered net profit for three consecutive quarters," he said.

The lender is awaiting resolutions to the tune of Rs 6,000 crore in the NCLT, out of which Rs 1,600 crore is from exposure to power and steel sectors alone. On the proposed amalgamation between Punjab National Bank, Oriental Bank of Commerce and UBI, Pradhan said, "The process is progressing smoothly so far. We are giving prime attention to HR issues."

The amalgamated entity is expected to be operational from April 2020.

UBI brought down its net non-performing assets (NPAs) to 7.88 per cent as on September 30, from 14.36 per cent by the end of September 2018.

Gross NPAs or bad loans reduced to 15.51 per cent of the gross advances by the end of September, compared with 22.69 per cent in the year-ago period.

In absolute terms, the net NPAs were Rs 5,380.93 crore against Rs 8,658.10 crore, while the gross NPAs were Rs 11,544.19 crore from Rs 15,163.28 crore.

The bank's provisioning and contingencies requirement for July-September 2019 came down to Rs 436.42 crore from Rs 1,481.24 crore parked aside for the year-ago period.

The lender said it made additional provision of Rs 46.75 crore in respect of eligible NCLT accounts by the end of second quarter.

"Actual provision as on September 30, 2019, for NCLT (list 1 and 2) accounts stand at Rs 3,322.77 crore instead of Rs 3,276.01 crore as per IRAC (income recognition and asset classification) norms," it added.

Provision coverage ratio as on September 30 stood at 74.89 per cent, said United Bank of India.

Pradhan added that if the NCLT resolutions happen, UBI's NNPA level would reduce to between six and seven per cent by the end of December 2019.

Shares of United Bank of India closed 19.95 per cent higher at Rs 8.90 a piece on the BSE.

United Bank of India posts Rs 124-cr net profit in September quarter

Kolkata-based United Bank of India has posted a net profit of Rs 124 crore in the July-September quarter of 2019-20, against a net loss of Rs 883 crore in the same period last financial year.

This was the third straight quarter in which the bank had posted profits, led mainly by high interest and non-interest income, better recoveries and treasury gains, said United Bank Managing Director & Chief Executive Officer Ashok Kumar Pradhan. The bank could make a cash recovery of about Rs 520 crore in the quarter. So far this financial year, the bank has made cash recoveries to the tune of about Rs 1,100 crore.

However, the bank saw fresh slippages of close to Rs 1,000 crore in the September quarter, with corporate account slippages standing at around Rs 800 crore. New slippages include accounts of Reliance Commercial Finance, Reliance Home Finance, and Chenani Nashri Tunnelway Limited (which is a wholly owned subsidiary of IL&FS), Transportation Networks Limited (ITNL) and HKR Roadways.

The net interest income of the bank grew by about 74 per cent in the quarter to stand at Rs 773 crore.

The proportion of gross non-performing assets (NPA) in the bank’s total loans stood at 15.51 per cent, against 22.69 per cent in the same period last financial year. The proportion of net NPAs stood at 7.88 per cent, against 14.36 per cent in the same period last financial year.

The bank also saw a capital infusion of about Rs 1,666 crore last financial year.

Under the mega merger plan announced by Union Finance Minister Nirmala Sitharaman, Punjab National Bank, Oriental Bank of Commerce and United Bank of India are to combine and form the nation's second-largest lender.

United Bank of India reports Rs 105 cr profit in Q1 as NPAs decline

State-run United Bank of India on Tuesday reported a net profit of Rs 105 crore for the April-June quarter of this fiscal on the back of a rise in core income and fall in non-performing assets.

The Kolkata-headquartered lender had registered a net loss of Rs 388.68 crore during the April-June quarter of the previous fiscal year.

Total income in the first quarter rose to Rs 3,003.13 crore from Rs 2,549.71 crore in the year-ago quarter, United Bank of India said in a regulatory filing.

During the quarter, the bank's interest income increased to Rs 2,374.39 crore from Rs 2,155.02 crore while income from other sources jumped to Rs 628.74 crore from Rs 394.69 crore in the year-ago quarter.

Net interest margin (NIM) increased by 47 basis points to 2.83 per cent in the first quarter from 2.36 per cent year ago, the bank said. Net interest income for the quarter rose to Rs 727.47 crore from Rs 545.30 crore year earlier.

The bank brought down its bad assets substantially as the gross non-performing assets (NPAs) fell to 15.89 per cent of gross advances as on June 30, 2019, from 22.73 per cent of gross advances as at end of June 2018.

Likewise, the net NPAs were nearly halved to 8.19 per cent from 15.17 per cent.

In value terms, gross NPAs or bad loans stood at Rs 11,639.74 crore as on June 30, 2019, as against Rs 15,169.21 crore a year ago. Net NPAs were at Rs 5,496.09 crore, down from Rs 9,232.61 crore.

Thus, the overall provisioning and contingencies for June quarter of 2019-20 came down to Rs 571.65 crore from Rs 856.30 crore in the same period of 2018-19.

"Provision for non-performing loans in June quarter declined by 40.60 per cent on the year. Stressed assets position showed continuous improvement," United Bank of India said.

The return on assets as of June 30, 2019, was 0.28 per cent against (-) 1.08 per cent at the end of June 2018.

Total business stood at Rs 2.06 lakh crore with deposits at Rs 1.32 lakh crore and advances at Rs 73,249 crore. Deposits grew by about 3 per cent, advances increased by 9.75 per cent and total business improved by 5.29 per cent on a year-on-year basis, the bank said in a release.

Provision Coverage Ratio (PCR) improved to 74.38 per cent as on June 30, 2019, against 56.91 per cent as on June 30, 2018.

The bank said it is focussing on RAM (retail-agriculture-MSME), for which the credit portfolio is expected to reach 60 per cent, in order to achieve sustained growth and profitability.

"Besides, management of stressed assets remains the topmost priority of the bank. stressed Asset Management Branches (sAMBs) have been empowered with a dedicated team of officers in all regions with an exclusive focus on recovery/resolution," it said.

United Bank of India shares closed 1.68 per cent up at Rs 9.68 on BSE.