Although the crisis-hit bank improved its profitability in Q4FY13, for the entire year its bottomline remained in the red as it posted a net loss of Rs 1,213 crore against a profit of R392 crore in 2012-13. In the second and third quarters of FY14, the bank registered a total net loss of more than R1,700 crore.
Since the last quarter we have started earning net profit. So, we hope that we will continue to the same path of recovery. This year we are all hopeful that we will have net profit, United Bank of India executive director Sanjay Arya told shareholders during the annual general meeting.
Making a turnaround, the bank reported a net profit of R469 crore for the March quarter on the back of a strong bad loans recovery performance coupled with a decent growth in net interest income.
The lender made a reduction in its gross non-performing assets (NPAs) of R1,427 crore in Q4FY14. Gross NPAs to gross advances in Q3FY14 had jumped to 10.82% to R8,545 crore.
The bank on Wednesday sought shareholders approval for raising up to R1,000 crore capital. The capital raising plan is in addition to R575 crore it is planning to raise by this quarter-end through converting perpetual non-cumulative preference shares to common equity in favour of the government and allotting equity shares to LIC on preferential basis.
The banks capital adequacy ratio stood at 9.01% under Basel-III norms by the end of December quarter last fiscal, against the minimum requirement of 9%. The crucial ratio improved to 9.81% at the end of March 31, 2014. It is targeting to maintain CRAR at 10% by FY15-end by raising the additional capital. At present, the government owns close to 88% of the lender.