UBI reports Rs 1,531 cr loss in second quarter, deposits see upward trend

Union Bank of India on Friday reported a net loss of Rs 1,531 crore for the September quarter due to steep rise in bad loans and the state-run lender has made full provisions for the 11 accounts referred to NCLT in the period. The bank had reported a profit after tax Rs 177 crore in the year-ago period. The bank also warned of more pains in the next two quarters as it will have make the entire provisions for the second RBI list of 28 accounts referred to the NCLT of which the bank has exposure to 18 accounts.

"We have made an additional upfront provisioning of Rs 1,566 crore for the 11 accounts referred under the NCLT. With that, our loss for this quarter is Rs 1,531 crore," managing director and chief executive Rajkiran Rai G told reporters.

The Reserve Bank had asked banks to spread the provision for the 12 large stressed accounts, which are referred to the NCLT, over three quarters till March 2018. Had the bank taken one-third of the provisions, losses could have been Rs 500 crore in the quarter, Rai said. From the second list of 28 large stressed accounts which RBI has banks to resolve before December 13, the bank has exposure to 18 accounts.

"For the second list of accounts we are required to make an additional provision of 1,087 crore. It will come in the December and March quarters. This is going to hit us in the next two quarters," Rai said. Global NIM stood at 2.08 per cent as against 2.30 per cent in the year-ago period, while domestic NIM stood at 2.19 per cent as against 2.43 per cent last year.

Total deposit of the bank grew 6.8 per cent to Rs 3,86,025 as of end September from Rs 3,61,454 crore last year. Rai said the bank's capital requirement is Rs 4,000 crore for the year. It has already received board to raise Rs 2,000 through QIP, public issue or private placement.