Bad Loans At United Bank Of India Rise Further
United Bank of India saw bad loans rise further during the three-months ended September 2016 even as treasury gains helped the bank report a net profit for the quarter.
The Kolkata-based lender reported a net profit of Rs 43.53 crore for the July-September quarter, a drop of 30 percent compared to Rs 61.86 crore in the corresponding quarter last year.
Gross non-performing assets (NPAs) as a percentage of total loans rose to 16.26 percent compared to 14.29 percent in the previous quarter and 8.90 percent in the same quarter last year. In absolute terms, gross bad loans rose to Rs 11,134 crore at the end of the second quarter, up 10 percent compared to Rs 10,116 crore at the end of the first quarter.
United Bank of India, along with Indian Overseas Bank and UCO Bank had the highest proportion of loans classified as bad across listed banks. The other two are yet to report earnings for the September-ended quarter.
In the July-September quarter, United Bank set aside Rs 401 crore as provisions compared to Rs 161 crore in the same quarter last year. Post provisioning, net NPAs stood at 11.19 percent in the second quarter of the current fiscal compared to 5.61 percent in the same quarter last year.
The bank was helped by treasury gains as a consequence of a fall in government bond yields. Profit from treasury operations rose to Rs 515.86 crore in the September quarter compared to Rs 311.77 crore in the corresponding quarter last year.
The bank, which received Rs 608 crore in capital infusion from the government during the quarter, now has a capital adequacy ratio of 8.56 percent compared to 7.56 percent at the end of the first quarter.
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