On account of a high level of bad debt and provisioning for it, government-owned United Bank of India (UBI) reported a net loss of Rs 2.6 billion for the March quarter. In the same period a year before, it had a net profit of Rs 735 million.
For the entire financial year of 2017-18, it had a net loss of Rs 14.5 billion, against a net profit of about Rs 2 billion in 2016-17.
Pawan Bajaj, managing director, told Business Standard they would seek Reserve Bank of India and government permission to use about Rs 14 billion from their share premium account of Rs 40 billion, to set off the accumulated loss. This is expected to be completed in the next two months.
Provisioning for non-performing assets (NPAs) was Rs 13 billion, as compared to Rs 7.5 billion in January-March 2017. Gross NPAs were Rs 165 billion, against Rs 109 billion in the March quarter of 2016-17, a ratio against advances of 24.1 per cent, against 15.53 per cent a year before.
Net NPAs in the quarter were Rs 103 billion, against Rs 65 billion in that period of 2016-17; the ratio being 16.49 per cent, against the earlier 10.02 per cent.