United Bank board meets to discuss turnaround strategy

Written by Mithun Dasgupta | Kolkata | Updated: Feb 23 2014, 11:11am hrs
Board members of the crisis-hit United Bank of India (UBI) on Saturday discussed turnaround strategies for the bank, which lost its chairman and managing director Archana Bhargava the previous day.

We have discussed turnaround strategies for the bank in todays meeting. We believe it is an achievable target for the bank to post a net profit in the March quarter, UBI executive director Sanjay Arya told FE.

The bank had reported a net loss of more than R1,200 crore in the December quarter. The ratio of gross non-performing asset (NPA) to total advances during the Q3 of this fiscal jumped to 10.82%, with the amount of gross NPAs touching a whopping R8,545.50 crore. According to Arya, in the meeting, the strategies to contain fresh slippages, as well as recovering huge bad loans were prepared in order to improve the performance of the troubled bank by this fiscal-end.

Our operating profit is decent. What had affected our net profit is huge NPA provisioning on the back of piling up of substantial NPAs. So, we have discussed ways to contain slippages and aggressive recovery. We have also decided to constantly chase all the defaulters, he said. Significantly, it was the first board meeting of the bank after Bhargava quit.

Bhargava resigned as CMD even as the bank is facing a probe by the RBI and the government regarding the piling up of bad loans. Financial services secretary Rajiv Takru said Bhargava had put in her papers mentioning health conditions. However, reportedly, she had continuous faceoff with top officials regarding key operational issues, especially classification of asset quality in order to flag off NPAs.