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United Bank hits the roof after turnaround Q2 numbers

Capital Market 

United Bank of India hit 20% upper circuit at Rs 8.90 after the bank reported a net profit of Rs 123.88 crore in Q2 September 2019 compared with a net loss of Rs 883.17 crore in Q2 September 2018.

Total income rose 15.89% to Rs 3013.74 crore in Q2 September 2019 over Q2 September 2018. The result was announced during market hours today, 30 October 2019.

Gross non-performing assets (NPAs) stood at Rs 11544.19 crore as on 30 September 2019 as against Rs 11639.74 crore as on 30 June 2019 and Rs 15163.28 crore as on 30 September 2018.

The ratio of gross NPAs to gross advances stood at 15.51% as on 30 September 2019 as against 15.89% as on 30 June 2019 and 22.69% as on 30 September 2018.

The ratio of net NPAs to net advances stood at 7.88% as on 30 September 2019 as against 8.19% as on 30 June 2019 and 14.36% as on 30 September 2018.

The bank's provisions and contingencies fell 70.53% to Rs 436.42 crore in Q2 September 2019 over Q2 September 2018.

Provision for Non Performing Assets declined by 47.13% in Q2 September 2019 over Q2 September 2018.

Provision coverage ratio (PCR) improved to 74.89% as on 30 September 2019 against 60.10% as on 30 September 2018.

CASA deposits further improved to 50.92% of total deposits with a growth of 169 bps in Q2 September 2019 over Q2 September 2018.

NIM increased to 2.91% in Q2 FY20 thereby recording an improvement of 75 bps over 2.16% in Q2 FY19.

Net interest income (NII) for quarter ended on 30 September 2019 increased to Rs 772.78 crore against Rs 442.60 crore in the same quarter last fiscal.

On September 20, 2019 vide the Taxation Laws (Amendment) Ordinance, 2019, the Government of India inserted Section 115BAA in the Income Tax Act, 1961, which provides domestic companies a non-reversible option to pay corporate tax at reduced rates effective from April 01, 2019 subject to certain conditions. The Bank is currently in the process of evaluating this option.

Two accounts in the power and steel sectors have been declared as fraudulent during Q2 of current FY 19-20. As of 30 September 2019, the outstanding aggregated to Rs 928.03 crore with provision of Rs 911.15 crore (referred to NCLT).

The bank received amount of Rs 1666 crore from Government of India on 27 September 2019 towards capital infusion under the PSBs recapitalization plan which is lying in the "share application money pending allotment" as on 30 September 2019.

Pursuant to Government of India's letter dated 30 August 2019 on 'amalgamation of PSBS', the board of directors of the Bank at its meeting held on 18 September 2019, has considered and accorded its "in principle approval" for amalgamation of United Bank of India, Oriental Bank of Commerce and Punjab National Bank and commencement of the amalgamation process, subject to all applicable approvals.

On the BSE, 3.15 lakh shares were traded in the counter so far compared with average daily volumes of 34,098 shares in the past two weeks. The stock hit a high of Rs 8.9 and a low of Rs 7.55 so far during the day.

The stock hit a 52-week high of Rs 13.25 on 01 Jan 2019. The stock hit a 52-week low of Rs 6.5 on 15 Oct 2019.

United Bank of India is a public sector bank. Government of India holds 96.83% stake in the Bank (as on 30 September 2019).

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, October 30 2019. 15:41 IST
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