UBI says it's on course to erase legacy losses by Sept

The Kolkata-based United Bank of India (UBI) could wipe off its entire Rs 500 crore of accumulated losses by September 2005.

The bank is also hopeful of bringing down its net non performing assets (NPA) levels to two per cent and surpass Rs 600 crore operating profit by March 2005.

It was further expected that it would retain last year's profit at around Rs 315 crore despite lack of treasury profit.

"The bank's balance sheet position as on December 2005 is strong enough to wipe out the legacy losses that accrued to the bank till 1998," explained K N Prithiraj, executive director UBI.

"Our net NPA stands at Rs 223 crore, which in percentage terms would be around 2.45 per cent against 3.76 per cent as on March 2004. Net NPA at UBI for sure will be around 2 per cent by March 05 and less than two per cent by September 2005," he added.

Provisions made at UBI in the first two quarters of the current fiscal was expected to translate into increased net profit at UBI.

"We have already made whatever was required in the first two quarters of the current fiscal which translates into the fact that the bank will not require any major provisioning," he explained.

Talking about net advances at UBI, Prithiraj said that the bank which has been concentrating on cleaning its balance sheet in the last couple of years has now concentrated on enhancing advances which witnessed a Rs 2,523 crore rise in the first nine months of the current fiscal. UBI hopes to end the fiscal with a Rs 3,000 crore.

Retail portfolio also increased at a similar pace and total outstanding on December 2004 stood at Rs 1,570 crore till December 2004. The bank expects to close the year at Rs 1,700 crore. Sources at UBI said that incremental business touched Rs 3,330 crore in the third quarter against Rs 2256 crore till March 2004

The bank has registered a Rs 469 crore operating profit in the first nine months of 2004-05 against Rs 392 crore in the previous corresponding period. Net profit on the other hand touched Rs 180 crore against Rs 168 crore in the previous period.

Talking about capital base, Prithiraj said that the figure stood at Rs 1,800 crore including both Tier-I and Tier-II capital.

It was planning to go for an initial public offer to divest a portion of the government holding in the fiscal 1006-07 "" two years hence only after it had effectively cleaned its balance sheet and improve the fundamentals of the bank.