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United Bank of India back in the black after 7 quarters

The Kolkata-based lender had reported Rs 260 crore loss in the year ago period.

ET Bureau|
May 13, 2019, 08.31 PM IST
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Kolkata: State-owned United Bank of India has reported Rs 95 crore net profit for the March quarter owing to significant improvement in asset quality and treasury earnings which helped the lender turn around after making losses for seven consecutive quarters.

The Kolkata-based lender had reported Rs 260 crore loss in the year ago period.

It earned four times higher operating profit at Rs 540 crore for the period under review as compared with Rs 133 crore in the year ago period with net interest margin improving to 2.43% in the fourth quarter and treasury income growing to Rs 523 crore from Rs Rs 238 crore.

UBI’s stressed assets position improved in the fourth quarter with gross non-performing assets ratio dipping to 16.48% at the end of March from 24.10 a year back. Net NPA ratio improved to 8.67% from 16.49%. Its provision coverage improved to 72.94% as against 53.48% last year.

The bank’s board, which has taken note of the financial performance on Monday, okayed raising equity capital up to Rs 1500 crore in one or more tranches during the financial year by way of qualified institutions placement, public issue or rights issue.

UBI chief executive officer Ashok Kumar Pradhan had told ET in the last week of April that the bank was looking to raise about Rs 1000 crore in QIP.

Its capital adequacy is now at 13%, improved from 9.99% three months back after it received Rs 4998 crore from the government during third and fourth quarters. Government holding in the bank rose to 96.8%.

“ln order to conserve capital, the bank concentrated on fresh exposures of higher rated corporate and PSU borrowers, ensuring secured exposures to the extent possible,” it said in a regulatory filing to stock exchanges.
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