United Bank of India has approached the Central Government for capital infusion of Rs 305 crore under the Government's recapitalisation scheme. The bank had recently raised Tier II capital of Rs 100 crore by issuing non-convertible bonds.
“We have asked for Rs 305 crore from the Government and we are hopeful of getting the funds soon,” said Mr S. L. Bansal, Executive Director, United Bank of India.
The bank's capital-adequacy ratio stood at 12.63 per cent as on December 31, 2011 and its Tier I capital was at 8.37 per cent.
Backed by a growth in core business and a rise in net interest income, United Bank of India posted 38 per cent rise in net profit to Rs 226 crore for the quarter ended December 31, 2011, compared with same period last year.
Net interest income grew by 19 per cent to Rs 668 crore. Shares of United Bank of India rose 9.41 per cent to Rs 71.50 on the BSE on Tuesday.
Net interest margin improved to 3.38 per cent (3.21 per cent).
United Bank expects 16-18 per cent growth in credit during the fourth quarter of this fiscal. Replying to a query regarding the possibility of a cut in interest rates, the bank's chairman and managing director, Mr Bhaskar Sen, said, “We are not thinking about revision in interest rates as there is not much scope for that now. We are monitoring the liquidity situation.”
The bank's gross and net non-performing assets increased to 3.28 per cent (2.93 per cent) and 2.01 per cent (1.52 per cent) respectively. However, on a sequential basis, the net NPAs came down from 2.21 per cent during the quarter ended September 30, 2011.
“Tight macro economic and liquidity conditions and migration to system generation have led to a rise in NPAs,” Mr Sen said.