UBI counts on one-time settlement scheme for Rs 4,000-cr NPA recovery in FY20; may raise fund up to Rs 1,500 cr

Kolkata: United Bank of India is targeting non-performing asset (NPA) recovery of around Rs 4,000 crore in 2019-20 fiscal on the back of a one-time settlement (OTS) scheme, a top official said on Friday. In the April-June quarter, the state-owned lender is expecting a recovery of Rs 300-400 crore, which would mainly accrue from the retailing sector, United Bank of India (UBI) MD and CEO Ashok Kumar Pradhan told PTI. “We are not expecting any huge recovery from the resolution process, particularly from the steel and power sectors,” he said. The government holds over 96 percent share capital in the bank. [caption id=“attachment_6013191” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] Pradhan said that the board of directors has approved capital raising of Rs 1,000-1,500 crore either through QIP, private placement or share offer to employees. The bank made a turnaround by reporting Rs 95 crore net profit in the March quarter, the first after seven consecutive quarters of losses. During the quarter, the operating margin improved with healthy CASA growth and low cost of the deposit, he said. “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,” Pradhan said. UBI had posted an overall net loss of Rs 2,316 crore in the last fiscal, owing to a rise in stressed assets and muted loan book growth. The bank’s gross NPA reduced from 24.10 percent to 16.48 percent year-on-year, while net NPA came down from 16.49 percent to 8.67 percent, he said. Pradhan said the lender received capital support to the tune of Rs 4,998 crore from the Centre during 2018-19. He said UBI has been focusing on the RAM (Retail, Agricultural and MSME) segment for lending. “We should be out of RBI’s prompt corrective action (PCA) framework by the second quarter of 2019-20,” he added.