Backed by a favourable interest rate scenario and gains in treasury income, United Bank of India reported a net profit of Rs 109.74 crore for the quarter ended September, a 30.9 per cent rise compared to Rs 83.83 crore in the same period last year.
Net interest margin increased to 3.04 per cent in the second quarter, as against 2.10 per cent in the year-ago period.
Treasury income increased 59 per cent to Rs 44.08 crore.
Net interest income increased 48 per cent to Rs 526 crore in the September quarter. While the cost of deposits slipped to 5.57 per cent compared to six per cent in the year-ago period, the yield on advances increased to 9.90 per cent from 9.46 per cent.
“We could restrict interest outflow and at the same time, exit from low yielding assets. The non-interest income, including treasury gains, too, contributed to the profit,” said Bhaskar Sen, chairman and managing director, United Bank of India.
However, the bank reported a mere 6.50 per cent rise in deposits and 13.70 per cent growth in advances.
“The growth in deposits is below our expectations. We took refinance, instead of bulk deposits. Going forward, we are not much concerned about the slow deposit growth and expect better growth in the third quarter,” said Sen.
The bank is targeting 20 per cent growth in advances and an 18 per cent rise in deposits for the whole year.
“Inflation is likely to come down due to good food grain production. When it comes to a level of 6.5 per cent, we expect deposits to be available at a lower rate,” said Sen.
The bank saw fresh slippages of Rs 203 crore in the quarter and the entire debt recovery portfolio of Rs 22 crore slipped into the non performing assets (NPA) category. Also, it saw defaults from some big corporates.
The net NPA stood at 1.58 per cent or Rs 729 crore.
GIC Housing Fin net up 20 per cent
GIC Housing Finance reported a net profit of Rs 20.48 crore for the quarter ended September, a 20 per cent rise compared to Rs 17.19 crore in the corresponding quarter last year.
Total income grew 11 per cent to Rs 85.32 crore from Rs 76.6 crore an year ago.
Over the same period, provisions rose to Rs 2.95 crore from Rs 1.79 crore.
