UBI reports Rs 1,238-cr loss

Losses more than double over previous quarter; gross NPA exceeds 10%

The government-owned United Bank of India (UBI) reported a Rs 1,238-crore loss in the three-month period ended December, as compared to Rs 42.2 crore profit during the corresponding period of the previous year on the back of Rs 1,858-crore provisioning.  Provisions include non-performing assets, restructured advances, investments, wage and pensions, among others.

The Reserve Bank of India (RBI) had ordered a forensic audit on the Kolkata-based bank after it posted Rs 489-crore loss in the previous quarter. Pending the audit, the loan sanctioning power of the bank was limited to Rs 10 crore.

The bank's Board met in New Delhi on Friday to finalise the results, after an earlier meeting on February 1 for the same purpose turned out to be inconclusive.

Most of the financial parameters of the bank — in which the government holds 88 per cent stake — declined during the third quarter with gross non-performing assets seeing a staggering growth of more than Rs 2,000 crore, which stood at Rs 8,545 crore.  This is 10.82 per cent of the gross advances.

Net NPA, as on December end was Rs 5,630 crore or 7.44 per cent as compared to 5.39 per cent a quarter ago. Net interest income — the difference between interest earned and interest expended — however, grew almost 20 per cent to Rs 761 crore.

UBI’s gross NPA is highest in terms of percentage, among listed banks in India. The bank officials were unavailable for comment on its performance.

Due to higher provisioning, the capital adequacy ratio (CAR) also slipped to 9.93 per cent – according to the Basel-II norms, as compared to 10.35 per cent in end-September. According to the Basel-III norms, CAR stood at 9.01 per cent as on December-end. Regulation requires banks to have minimum 9 per cent of CAR.