United Bank reports fall of 30% in net profit over bad loans

United Bank of India has reported a fall of 29.6% in net profit to Rs 43.53 crore for the September quarter as it doubled provisions for bad loans.

UBI's net profit in the July-September quarter of financial year 2015-16 was at Rs 61.86 crore.

Its income also fell marginally by 1.2% to Rs 2,893.31 crore during the quarter under review as against Rs 2,927.19 crore a year ago as corporate earnings decreased.

United Bank's bad loans, both in terms of net and gross advances, jumped by 82-95% that resulted in a higher allocation for provisioning as per Reserve Bank of India (RBI) guidelines.

The gross non-performing assets (NPAs) as a percentage of gross advances increased to 16.26% as on September 2016, against 8.90% a year ago. In absolute terms, gross NPAs were at Rs 11,134.47 crore, up from Rs 6,112.21 crore.

Net NPAs were at 11.19% (Rs 7,185.23 crore) of net loans, up from 5.61% (Rs 3,677.37 crore) in year ago period.

Thus, Bank's provision for bad loans and contingencies were raised to Rs 401.03 crore, as compared to Rs 163.10 crore year ago. The provision coverage ratio as at September 30, 2016 stood at 51.70.

The bank's Board of Directors has approved preferential allotment of equity shares to Life Insurance corporation (LIC) or any fund up to Rs 300 crore.

The total assets of the bank at the end of September 2016 increased to Rs 1.30 lakh crore, from Rs 1.25 lakh crore.

United Bank of India stock was 0.96% up at Rs 20.95 on BSE.