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United Bank reports ₹104.9 crore Q1 profit

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Says it will come out of PCA by Sept.

Kolkata-based United Bank of India (UBI) closed the first quarter of fiscal 2020 with a ₹104.9 crore net profit as against ₹388.7 crore loss a year ago. Total business grew by around 3% during this period.

“The worst is behind us and we will come out of the RBI’s prompt and corrective action (PCA) framework by the second quarter,” UBI managing director and chief executive officer Ashok Kumar Pradhan said at a press meet.

He attributed the improved performance to a 2.8% increase in net interest margin and an improvement in cost-to-income ration at 49.7%, among other parameters.

During this quarter, UBI’s provisions for non-performing assets stood at ₹414.6 crore against ₹697.8 crore a year ago. “Stressed assets position has shown continuous improvement with a decline in the GNPA and NNPA ratio,” the bank said in a release.

Mr. Pradhan said that a recovery target of ₹4,000 crore had been set for this fiscal, of which ₹820 crore had been achieved.

He also said that the bank would take a call on deposit rate (reduction) at an appropriate time, but added that rate transmission may not happen automatically due to ‘a number of constraints’.

He said that UBI’s retail agriculture and MSME (RAM) portfolio was expected to reach 60% of the bank’s credit portfolio by 2020 from 52% now. “Bank expects to grow retail at 24% , agriculture at 11% and MSME at 24% in the current fiscal,” Mr. Pradhan said.

UBI also plans to raise ₹1,500 crore in 2019-20, for which shareholders’ nod had already been obtained.

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Printable version | Dec 11, 2019 4:24:06 PM | https://www.thehindu.com/business/united-bank-reports-1049-crore-q1-profit/article28763053.ece

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