Crisis-hit United Bank of India will put R400 crore of bad loans on the block during the first quarter of this fiscal to improve its balance sheet after its plan to sell some of its huge non-performing assets to asset reconstruction companies (ARCs) failed to fructify in the fourth quarter of the last financial year.

The Kolkata-based bank had planned to offload stressed assets worth R450-500 crore in the March quarter of FY14, but it did not happen as asset reconstruction firms quoted a very low price.

?Last time, ARCs had quoted a very low price and selling off our bad assets at that price would have led to huge losses,? United Bank of India executive director D Narang told FE.

Narang said the bank, currently talking to ARCs, was hoping to get good prices from the auctions this time. ?We will again put our stressed assets on the block. We should get good prices from the ARCs, as along with the assets, our bank is also giving actionable claims. So, the loans are highly recoverable,? he said.

Significantly, United Bank?s gross non-performing assets (NPAs) to gross advances during the third quarter of last fiscal jumped to 10.82% to R8,545.50 crore.

The country?s ARCs, which seek to acquire bad assets at a discount and recover the money from defaulters, have recently seen a large jump in supply of stressed assets as banks are scrambling to clean up their balance sheets.

Even the country?s largest bank, the State Bank of India (SBI), said it was in the process of selling NPAs worth around R3,500-4,000 crore to ARCs for the first time.

The United Bank is expected to report a net profit in the fourth quarter of last financial year after registering net losses in the September as well as December quarters.

?We will see a turnaround in the March quarter itself?it will be a profit-making quarter,? Narang said. The bank had reported a net loss of more than R1,200 crore in December quarter last fiscal.

According to Narang, the turnaround would be on the back of a robust recovery, which led to a reduction in bad assets. He said the bank?s total recovery was expected to exceed R2,000 crore for the last quarter of FY14, but net recovery could be below R2,000 crore as, during the quarter, it had suffered some fresh slippages as well.