United Bank seeks govt nod to set off accumulated losses

United Bank of India (UBI) has applied to the government of India for adjusting its accumulated losses against its capital reserve, P K Gupta, chairman and managing director, UBI, said here today.

Gupta said, "We have applied to the government for adjusting the accumulated loss of Rs 278.44 crore as on March 2005 against the bank's capital reserve of Rs 1,810.67 crore." This is the first move towards floating initial public offering (IPO), he added.

He further said, "The bank is awaiting Reserve Bank of India's guidelines for alternate capital restructuring policy such as classifying preferential capital as Tier-I capital."

Gupta announced the first half result of the bank today. Its total business stood at Rs 38,995 crore for the first half of the current fiscal, up 17 per cent than Rs 33,300 crore recorded in the previous corresponding period.

Though the bank recorded a growth in operating profit during April-September at Rs 359 crore against the previous corresponding figure of Rs 336 crore, its net profit moved up slightly at Rs 104 crore (0.97 per cent) against Rs 103 crore in the previous corresponding period.

"Wage revision, additional provision for doubtful non-performing assets (NPA) and depreciation on investment has resulted in only a marginal growth in net profit," explained Gupta.

Its net NPA grew to Rs 317 crore during April-September, while the figure was Rs 277 crore in March, he noted. Net advances during the first half was Rs 12,992 crore, registering a growth of 36.6 per cent over the previous corresponding figure of Rs 9,514 crore.

Deposits stood at Rs 26,003 crore compared with Rs 23,816 crore earlier, up 9.18 per cent. Credit-deposit ratio increased from 42 per cent to 51.8 per cent during the same period.

The bank is looking at a total business of Rs 45,000 crore in the current fiscal, of which, Rs 16,000 crore would be advances and remaining Rs 29,000 would be deposit, he added.

The bank has plans to bring 70 branches on core banking solution platform by March 2007 and raise this number to 200 by March 2008, said Gupta.