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Shares of United Bank of India (UBI) are trading higher by 2.4% to Rs 38 on the BSE after it earned a net profit of Rs 42 crore in the October-December quarter, compared to a net loss of Rs 1,238 crore in the corresponding period of last year. Lower provisions, rise in non-interest income and cost control aided the bank's earnings during the three-month period.
However, net interest income (the difference between interest income and interest expense) fell by 18 per cent from a year earlier to Rs 623 crore as lending restrictions prevented the bank from growing its advances. The net interest margin was 2.2 per cent. Total advances were Rs 64,899 crore at the end of December compared to Rs 78,976 crore a year earlier.
The bank made provisions of Rs 520 crore during the quarter compared to Rs 1,858 crore a year ago. This was primarily because asset quality of the bank improved on a year-on-year basis. Provisions for non-performing assets (NPAs) fell to Rs 356 crore from Rs 1,078 crore during this period.
The bank plans to convert Rs 525 crore of perpetual non-cumulative preference shares into equity and also aims to raise tier-1 capital from the market.
The stock opened at Rs 38 and remained unchanged so far. A total of 17,691 shares changed hands on the BSE so far.
