United Bank of India Q1 result, posts profit as NPAs decline

United Bank of India on Tuesday reported a net profit of Rs 105 crore for the June quarter 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. 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.