 "United Bank of India net profit rises 47%")
“We believe that the NPA (non-performing asset) crisis has bottomed out. UBI is one of the few banks in the country that has seen a reduction in NPAs, in absolute terms, during the quarter,” Deepak Narang, executive director of the bank, said in his post-earnings comments.
The bank reported NPA reduction of Rs 966 crore in the April-June period compared with Rs 162 crore a year earlier. Cash recovery for the quarter was Rs 340 crore against Rs 65 crore a year ago. The state-run lender upgraded Rs 626 crore NPAs to standard assets in the first three months of this financial year compared to Rs 91 crore in the corresponding period of last year.
This allowed the bank to pare its NPA provisions to Rs 224 crore in the April-June period from Rs 305 crore a year ago. Gross NPAs were at Rs 7,097 crore while net bad loans were at Rs 4,687 crore at the end of June, 2014.
“We are bringing the bank back to the path of recovery. The improvement in our earnings is not by fluke. We have been stabilising our loan recovery process and lending cautiously,” Sanjay Arya, the other executive director of the bank, said.
UBI has set a target to make cash recoveries of at least Rs 1,150 crore in the current financial year. It also aims to upgrade Rs 1,650-1,700 crore NPAs to standard assets.
But despite the improvement in asset quality the bank witnessed fresh slippages worth Rs 1,194 crore during the quarter. “Our aim is to prevent further slippages. As things stand I don't expect more than Rs 150-200 crore of additional slippage in coming quarters. But it is a dynamic situation and we have to remain cautious,” Narang said.
He will attend a meeting on August 18 in New Delhi where lenders to Bhushan Steel will discuss the road map to recover their dues from the company. While loans to the steel company are still classified as standard assets, doubts have been raised over the repayment following the arrest of Bhushan Steel's Managing Director Neeraj Singal in the alleged Syndicate Bank bribery case.
On listing Kingfisher Airlines in its wilful defaulters' list, the bank said it was awaiting the Calcutta High Court's verdict. Kingfisher Airlines had moved the court challenging UBI's communication asking the grounded airline company's chairman, Vijay Mallya, and other board members to meet the bank officials for alleged wilful default of Rs 400 crore loans.
R-Cap net up 23%
Reliance Capital, part of billionaire Anil Ambani-led Reliance Group, said its consolidated net profit for the quarter ended June 2014 rose by 23 per cent to Rs 164 crore. It had posted a net profit of Rs 133 crore in the corresponding period last financial year.
The company's stock closed 2.2 per cent higher at Rs 562.15 per share on the BSE.
The profit from sale of subsidiaries and associates was Rs 38 crore in the reporting quarter.