Union Bank posts net loss of ₹260.62 cr as a result of NPAs

State-run United Bank of India (UBI) on Monday reported a net loss of ₹260.62 crore in the quarter ended March 31, due to higher provisioning for bad loans, against net profit of ₹73.56 crore in the same quarter last year.

During the March quarter, the bank’s operating profit, however, increased by 14.53% against last year, while net interest margin improved from 2.10 % to 2.30 % over last year. The non-interest income of the bank has also shown a robust growth of 39.34 % over last year, the bank said in a statement.

However, “owing to spike in NPA provisioning by about 78 %” as per Reserve Bank of India's revised framework on resolution of stressed assets, the overall profitability has been “adversely affected”, it said.

Its gross NPAs stood at ₹16,552.11 crore at the end of the quarter as compared with ₹10,951.99 crore last year.

Gross NPAs as a percentage of total advances rose to 24.1% at the end of 2017-18 from ₹15.53 per cent last year.

The Kolkata-headquartered lender reported a net loss of ₹1, 454.44 crore in 2017-18 as against a profit of ₹219.51 crore in the previous year.

Under Basel III, the bank's capital adequacy ratio has remained comfortable at 12.6 % with the tier I capital at 9.87 per cent as on March 31, 2018.