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United Bank of India (UBI) today said it incurred a loss of Rs 489.5 crore for the quarter ended September 30, 2013 as provisions almost quadrupled on account severe deterioration in asset quality. The state-run lender had earned a profit of Rs 144.6 crore in the corresponding period of last year.
Provisions and contingencies increased to Rs 987.4 crore in July-September period from Rs 258.6 crore a year earlier. This was primarily on account of increase in bad loans. Gross non-performing assets increased sequentially by Rs 2,284 crore. The gross bad loan ratio deteriorated sharply, by 364 basis points year-on-year, to 7.52 per cent at the end of September, 2013.
The net non-performing asset ratio also increased to 5.39 per cent at the end of the second quarter from 1.95 per cent in the corresponding period of last year. The bank now has one of the worst non-performing asset ratios in the industry.
Net interest income, or the difference between interest income and interest expense, fell by almost 15 per cent from a year ago to Rs 516.7 crore in July-September period.
Advances increased by 19 per cent from a year earlier to Rs 81,986.6 crore. Deposits were at Rs 117,727.90 crore at the end of the quarter, up 17 per cent year-on-year.
The bank closed the quarter with a capital adequacy ratio of 9.48 per cent as per Basel III norms.
Friday, UBI shares ended at Rs 37.70 on the National Stock Exchange (NSE), down 0.5 per cent from previous close.
