Ubi Unlikely To Come Out Of Red

United Bank of India (UBI), the Calcutta-based public sector bank is likely to run up an operating loss for the financial year 1996-97 as well. The loss could be as high as Rs 30 crore to Rs 40 crore, sources say. Also, the banks non-performing assets (NPAs) remain at 31.5 per cent of the total advances.

This is contrary to the optimism displayed by UBI chairman and managing director Biswajit Chowdhury that the bank would make an operating profit for the year.

In fiscal 1995-96, the bank had run up an operating loss of about Rs 50 crore and a net loss of about Rs 234.46 crore. The banks total accumulated losses as on March 31, 1996, stood at Rs 1,320.43 crore.

 

Sources said the ailing banks total deposits stood at about Rs 10,400 crore as on March 31, 1997. This represents a growth of over 18 per cent over the previous fiscal. As on March 31, 1996, UBIs total deposits stood at Rs 8,789.93 crore.

The banks total advances have grown substantially to about Rs 3,900 crore as on March 31, 1997, from about Rs 2,851 crore as on March 31, 1996.

The banks credit has grown primarily due to some corporate accounts like Indian Airlines which the bank acquired towards the end of the fiscal year.

The sources told Business Standard that UBI had failed to meet its target in terms of recovery of non-performing assets.

The banks NPAs stood at a whopping Rs 1,400 crore against total advances of Rs 2,851 crore as on March 31, 1996.

For fiscal 1997, the bank had targetted a recovery of about Rs 240 crore of NPAs. Of this, sources said, the bank has been able to recover only about Rs 110 crore in the fiscal year. Most of the recovery has been from the small and medium sized accounts of the bank, they said.

As on March 31, 1997, UBIs NPAs still stand at a substantial Rs 1,230 crore which accounts for 31.5 per cent of total advances.

Among United Bank of Indias chief problems is the fact that it is not in true terms a national bank with the majority of its branches being concentrated in the eastern and north-eastern parts of the country where business is sluggish and recovery records poor. Also, the bank has been saddled with a large number of tea accounts which have become non-performing.