State-owned United Bank of India (UBI) reported a net profit of ₹123.88 crore in the second quarter ended September 30, on the back of substantially lower bad loans, leading to lower provisioning requirement.
The bank had posted a net loss of ₹883.17 crore in the July-September period of 2018-19. Sequentially, there was a net profit of ₹105 crore in the first quarter ended June this year.
Total income rose to ₹3,013.74 crore in the September 2019 quarter compared with ₹2,600.47 crore earned in the corresponding period of the previous financial year, the bank said in a regulatory filing.
The bank brought down its net non-performing assets (NPAs) to 7.88% as at September 30, from 14.36%.
Gross NPAs reduced to 15.51% of the gross advances by the end of September, compared with 22.69% in the year-ago period.
In absolute terms, the net NPAs were ₹5,380.93 crore against ₹8,658.10 crore while the gross NPAs were ₹11,544.19 crore against ₹15,163.28 crore.
Thus, the bank’s provisioning and contingencies requirement for July-September 2019 came down to ₹436.42 crore from the ₹1,481.24 crore parked aside for the year-ago period.
NCLT accounts
The lender said it made additional provision of ₹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 stands at ₹3,322.77 crore instead of ₹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%, the bank said in the filing.
“Pursuant to the government’s letter dated August 30, 2019, on amalgamation of PSBs (public sector banks), the board of directors of the bank, at its meeting held on September 18, 2019, had considered and accorded its in-principle approval for amalgamation of United Bank of India, Oriental Bank of Commerce and Punjab National Bank and commencement of the amalgamation process, subject to all applicable approvals,” it added.