United Bank Q1 profit down 27% at Rs 38 cr

State-run United Bank of India today reported a 26.6 per cent fall in net profit to Rs 38.32 crore for first quarter ended June 30, on higher bad loans.
The Kolkata-headquartered bank had registered a net profit of Rs 52.22 crore in the corresponding April-June quarter of 2015-16.
However, the first quarter results were better sequentially, as the bank had posted a loss of Rs 413.04 crore in January-March quarter of 2015-16.
Total income during the reported quarter fell to Rs 2,819.37 crore as against Rs 2,896.75 crore, showed the bank's balance sheet posted with regulators.
The asset quality of the bank worsened with gross non-performing assets (NPAs) rising to 14.29 per cent of the gross advances as of June 2016, up from 9.57 per cent in year ago period.

Likewise, net NPAs or bad loans rose to 9.85 of the net advances as against 6.30 per cent year earlier.

In absolute terms, gross NPAs were Rs 10,116.13 crore as against Rs 6,532.83 crore. While, net NPAs were to the tune of Rs 6,579.28 crore, up from Rs 4,091.20 crore year ago.
However, despite a high rate of NPAs, bank's provisioning for bad loans were lower at Rs 378.30 crore for June quarter of the fiscal, from Rs 493.58 crore year earlier.
Slippage increased due to economic slowdown and also, during the quarter, as par of assets quality review (AQR), RBI has advised to revise asset classification/provision in respect of certain advances, United Bank said.

"The bank has accordingly classified the advances and made the requisite provisions," it added.
Additionally, it informed that the Board of Directors of the Bank at its meeting held today has approved preferential allotment of equity to the Government up to Rs 810 crore.
United Bank stock closed 0.68 per cent up at Rs 22.10 on BSE today.