United Bank’s Q1 net skids 21%

By: | Published: August 4, 2015 12:13 AM

United Bank of India on Monday reported a 21% year-on-year dip in net profit to Rs 52.22 crore for the quarter ended June 30 from Rs 65.89 crore

Public sector lender United Bank of India on Monday reported a 21% year-on-year dip in net profit to Rs 52.22 crore for the quarter ended June 30 from Rs 65.89 crore in the year-ago period on the back of a lower interest income and a fall in other income.

Total income during the first quarter saw a 3.6% y-o-y decrease at Rs 2,896.74 with both interest income and other income falling. Interest income during the June quarter posted 2.6% y-o-y decline to Rs 2,534.12 crore, while other income registered close to 10% y-o-y fall at Rs 362.62 crore. Other income dipped during the April-June period as it saw about 27% y-o-y fall in profit from trading during the period.

Net interest income during the period under review, however, witnessed more than 5% y-o-y rise at Rs 628.31 crore against Rs 596.45 crore in the year-ago period. Net interest margin stood at 2.20% as on June 30, 2015.

P Srinivas, managing director and chief executive officer, said: “We had reduced our base rate, which led to a lower interest income. And also trading profit during the June quarter fell after posting hikes in the previous quarters. Despite all this, we have been able to demonstrate reasonably good performance in the first quarter.”

During the first quarter, the state-run lender’s provisions and contingencies rose about 3.5% y-o-y to Rs 526 crore, while provision towards bad loans fell 21.8% to Rs 175.85 crore. The lender’s gross NPAs in absolute terms decreased to Rs 6,532.82 crore from Rs 7,079.44 crore in the corresponding period last fiscal. Gross NPA as a percentage of total loans reduced to 9.57% in June quarter from 10.49% a year ago.

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