United Bank of India (UBI) has reported threefold rise in operating profit at Rs 276.37 crore at the end of the third quarter of 2001-02 against Rs 91.19 crore in the previous corresponding period.
Growth in profitability has enabled the bank to absorb and provide for Rs 193.92 crore - the major portion in respect to deferred expenditure of earlier years and extraordinary expenditure for voluntary retirement scheme (VRS). This translated into a Rs 82.45 crore net profit for the period against Rs 19.14 crore for the whole of 2000-01.
"The rise has mainly been due to a reduction in cost of deposits which improved to 7.4 per cent in the period against eight per cent in the previous period," explained chairman Madhukar.
"Yield on advances increased to 9.7 per cent in December against 9.3 per cent in the previous period. Net interest margin at UBI also increased to 3.2 per cent against 2.6 per cent," he said, adding, "Reshuffling of loan portfolio wherever possible has also helped us increase our bottomline".
Operating profit as percentage to average working fund at the bank increased to 0.87 per cent in the period under review against 0.61 per cent in the corresponding previous period. Return on assets also increased to 0.51 per cent against 0.09 per cent. The bank also managed to reduce its non-performing assets by Rs 72 crore in the period.
Meanwhile, after having downed shutters at 15 branches last year, the bank freezed its decision to close down all the 55 loss-making branches they had initially planned to merge or close down.
The thrust now is on making these branches profitable and 15 of them has in fact already showed profits in the third quarter. Rest of them have registered considerable improvement and are expected to be back on track in another few months.
