UBI declares six monthly results, posts profit

Kolkata, Oct 20: United Bank of India (UBI) has posted a healthy 56.1 per cent growth in its net profit margin to Rs 162.08 crores during the first six months of the current financial year even as the gross profit margin has declined by 16 per cent because of various reasons during the same period.

UBI Chariman and Managing Director P.K.Gupta and its Executive Director Sunanda Lahiri announcing the April to September 2006 financial results of the city-based bank said, however, during the second quarter of the current fiscal (July to September) the Bank had recorded a stupendous 128 per cent growth in profit after tax from Rs 40.29 crores to Rs 91.72 crores on quarter to quarter basis.

Regarding UBI's total business target of Rs 55,000 crores by March 2007, Mr Gupta said riding on the crest of multiple success they had already achieved the Rs 48,351 crores mark and hoped to cross the targetted figure quite comfortably before March next.

Deposits grew by 16.22 per cent to Rs 30,220 crore and advances grew by 38.21 per cent to Rs 18,622 crore over the same period last year.

Ruling out the possibility of opting for any immediate public issue to further improve the capital base of the bank, as being contemplated for long, the UBI Chairman said their proposal in this regard was still pending with the RBI for necessary clearance.

However, with the Bank's Capital Adequacy ratio hovering around 13.37 per cent we are not in a particular hurry to go for further injection of funds. But if necessary we might opt for Tier Two route to bridge the gap, he said.

Also ruling out the possibility of going out for any acquisition to improve its branch network at the national level, Mr Gupta said on the contrary the UBI Board of Directors, which met here yesterday, had decided to set up at least 150 new branches across the country,particularly in Northern and Central India to balance its branch network and business portfolios.

These apart we have decided to improve our ATM network and launch the much awaited Core Banking solutions by December this year when the CBS would be introduced in a Pilot branch. However, before March the number of CBS entrusted branches would be 55, he said adding that more than Rs 100 crores had been earmarked for this purpose.

Asked about the main reasons for the soaring profits, Mr Gupta said the increase in profits was attributable to sharp decline in provisional requirements and increase in the non interest income other than treasury.

In fact because of the inadequate income from treasury operation, UBI's gross profit margin was dipped by 16 per cent to Rs 301 crores from Rs 397 crores, earned during the corresponding period of last year (September 2005), he said.

The retail credit portfolios of the Bank during the first six months had also registered a healthy growth of 38.7 per cent to Rs 3030 crores with the Housing and Educational loan becoming the larger stakeholders, the Chairman informed.

Similarly, he said, both the gross and net NPA margins of the Bank as on September 2006 also reduced considerably to 4.37 per cent and 1.83 percent respectively.

UNI