Kolkata: The Kolkata Head-quartered United Bank of India held its 10th Annual General Meeting in a city auditorium on 27th June 2019 well attended by the shareholders of the Bank including the Central Government Representative. Central Government holds over 96% share capital in the Bank. The Bank made a turnaround by reporting Rs.95cr. net profit in the last quarter, first after seven consecutive quarters of losses, however reported an overall net loss of Rs.2316cr. on the Back of rise in stressed assets and muted growth of the loan book. The operating margin improved with healthy CASA growth and low cost of deposit, both best among the peers. The Bank also made a good ground in terms of NPA reduction which came down from 24.10% to 16.48% YoY at the gross level and from 16.49% to 8.67% YoY at net level. Bank received capital support to the tune of Rs.4998cr. from the Central Government during FY-19. With the capital infusion, the Bank reported a capital adequacy of 13.00% with Tier-1 capital which comprises the core equity capital of a Bank at 10.14%.
Sri Ashok Kumar Pradhan, MD & CEO of UBI who chaired his maiden Annual General Meeting, while interacting with the shareholders emphasized that the capital constraint and advisory from the Ministry have compelled the Bank to rationalize its Risk Weighted Assets to Rs.59432cr. in this fiscal. Sri. Pradhan said “with Government of India holding 96.83% of the share capital and LIC of India another 1.27%, the floating stock is precariously low. The Bank has a plan to raise up to Rs.1500 crore equity capital by a combination of QIP, FPO, Rights Issue and ESPS etc. This will help the Bank to augment its capital and align to the projected business plan as well as increase the public shareholding.” Both the agenda items on adoption of accounts and capital raising were duly approved by the shareholders.
The Bank has been focusing on the RAM segment i.e. Retail, Agricultural and MSME for lending. In order to give a fillip to the non-interest income, the Bank has tied up with five insurance companies including LICI under Life, General and Health segments and have a bouquet of other products like equity trading and demat, mutual funds etc. In order to bring down the NPA further, the Bank has further strengthened its recovery mechanism by creating Stress Asset Management Vertical and designating some branches as Stressed Asset Management Branch. The Bank has also brought out a liberalized Recovery Policy and Onetime Settlement Scheme and targeting a recovery of Rs.4000 crore of NPA.
Sri Pradhan concluded by saying “we are now on the track of profitability after seven quarters. The challenge ahead of us is to consolidate our position further and register improvement under all banking parameters. The entire Bank, from the Board level to the field, is dedicated to achieving that objective.”
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