State-run United Bank of India on Monday reported a 29.63% year-on-year decline in its net profit to `43.53 crore for the second quarter ended September 30, as provisions increased to cover rising bad loans. The lender had posted `61.86 crore net profit in the year-ago period.
During the September quarter non-performing assets (NPAs) in absolute term surged by over 82% y-o-y to `11,134.47 crore from `6,112.21 crore in corresponding period a year ago, the bank said in a stock exchange filing. On a quarter-on-quarter basis, gross NPA rose over 10% from `10116.13 crore in the June quarter. The bank said the slippage had increased sequentially due to economic slowdown.
Despite a 77% y-o-y growth in other income to `661.20 crore, total income of the bank declined by 1.16% y-o-y at `2,893.31 crore as its net interest income (NII) saw over 41% y-o-y decrease at `376.40 crore during the period under review. It, however, posted a healthy 53.92% y-o-y growth in operating profit at `436.59 crore during the September quarter, thanks to over 26% decline in operating expenses on payments to and provisions for employees.
The net interest margin at the end of September quarter stood at 1.27%, the lender said in a release.
The bank’s total provisions grew by a whopping 146% y-o-y at `401.03 crore during the second quarter this fiscal as against `163.10 crore for the corresponding period last fiscal as its asset quality deteriorated sharply.