United Bank of India (UBI) post a 53.50 per cent rise in net profit for the quarter ended June 2010 to Rs 107.86 crore, against Rs 70.28 crore in the same period last year.
Although the bank saw fresh slippages of 248 crore in the last quarter and treasury income fell almost 50 per cent over the corresponding quarter last year, it saw net interest income increase by about 93 per cent to about Rs 508 crore.
The bank’s treasury income fell to Rs 31.75 crore in the quarter under consideration, from Rs 61.20 crore in the first quarter of last year.
According to Mr. Bhaskar Sen, Chiarman and Managing Director, UBI, the increase in profitability was primarily due to restrictions on interest outflow, which was almost flat on a year-on-year basis. In the June 2009 quarter, the interest outflow was Rs 926 crore, which increased to Rs 928 crore in June 2010. The marginal 0.24 per cent rise was on account of the cost of borrowing.
The cost of deposits for the bank came down to 5.40 per cent in the April-June quarter, from 6.47 per cent in the quarter ended June 2009.
The bank’s provision coverage ratio stood at about 68 per cent in the first quarter of the present financial year, and the bank would need another Rs 50 crore to reach the 70 per cent mark mandated by the Reserve Bank of India.
The bank’s net interest margin in the last quarter was 2.98 per cent, against 1.90 per cent in the same period last year.
UBI’s capital to risk (Weighted) assets ratio (CRAR) in the quarter ended June 2010 was 12.99 per cent, against 13.18 per cent in the same period last year.
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