UBI profit flat on low net interest income

Due to pressure on its net interest income, United Bank of India posted only a marginal rise of 7.08 per cent in net profit to Rs 74.70 crore for the third quarter ended December 31, 2007, compared with Rs 69.74 crore posted in the same period last year.

The bank recorded a 62.6 per cent growth in its non-interest income during the third quarter and this non-interest income mainly contributed to the net profit, Chairman and Managing Director PK Gupta said.

UBI's non-interest income grew from Rs 75 crore in October-December 2006 to Rs 122 crore during October-December 2007.

Interest income for the same period rose from Rs 714 crore to Rs 915 crore, while total income increased from Rs 789 crore to Rs 1,037 crore. The bank's net profit for the nine-month period (April-December 2007) stood at Rs 307.21 crore, a 32 per cent rise over Rs 231.8 crore achieved in the same period last year.

During this period, the bank's interest income rose from Rs 2,043.12 crore to Rs 2,633.78 crore, a growth of 28.9 per cent. Non-interest income increased 45.2 per cent from Rs 202.56 crore to Rs 295.11 crore.

The bank has achieved a total business of Rs 65,554 crore (as on December 31, 2007) registering a y-o-y growth of about 21 per cent. The deposits, which grew by 23 per cent, were at Rs 41,203 crore, while the bank's advances read Rs 41,203 crore (as on December 31, 2007).

The bank's priority sector advances went up by 25.3 per cent from Rs 7676 crore on December 2006 to Rs 9620 crore on December 2007. Retail credit during the same period rose from Rs 3702 crore to Rs 6308 crore, recording a growth of 70.4 per cent.

The share of retail credit in total credit moved up from 17.9 per cent to 26.2 per cent in the same period. Under retail credit, the loans under housing sector surged by 138.7 per cent, while education loans grew by 26.2 per cent.

UBI's capital adequacy ratio improved to 13.63 per cent on December 2007 from 12.02 per cent on March 2007.

The bank's gross NPA (non-performing assets) stood at 3.85 per cent (as on December 31, 2007), while the net NPA worked out to be 1.3 per cent.

UBI realised Rs 114.40 crore by way of cash NPA recovery during April-December 2007.