UBI to rationalize its Risk Weighted Assets to Rs.59432 crores
Kolkata,28 June (HS): Capital constraints and advisory from the Union Finance Ministry have compelled the Kolkata headquartered Public sector United Bank of India (UBI) to rationalize its Risk Weighted Assets to Rs.59432 crores. during this fiscal.
This was informed here today by UBI Managing Director and Chief Executive Officer(CEO) Ashok Kumar Pradhan while speaking at the Annual General Meeting of the bank and during interaction on the sidelines.
According to Pradhan, with the union Government currently holding 96.83 per cent of the share capital of the bank and LIC enjoying another 1.27 per cent,the current floating stock was ‘precariously low’.
We now have a plan to raise up to Rs.1500 crores Equity capital by a combination of Qualified Institutional Placement (QIP),Follow on Public Offer(FPO) and the Rights Issue. This will help the Bank to augment its capital and align to the projected business plan as well as increase the public shareholding’,he said adding the Bank had currently been focusing on the RAM segment comprising Retail, Agricultural and MSME for lending.
In order to give a fillip to the non-interest income, the Bank had tied up with five insurance companies including with LIC under Life, General and Health segments and had a bouquet of other products like equity trading and
demat and mutual funds, the MD informed.
In order to bring down the NPA further,the Bank had further strengthened its recovery mechanism by creating Stress Asset Management Vertical and designating some branches as Stressed Asset Management Branches, Pradhan said adding the Bank had also brought out a liberalized Recovery Policy and Onetime Settlement Scheme with a target of recovering at least Rs.4000 crores of NPAs more during this fiscal.
‘We are now on the track of profitability after seven quarters’ the MD said and stated that among his main challenges was consolidation of the Bank’s position further and register improvement under all banking parameters. The entire Bank is dedicated to achieving these objective.he said.
It may be recalled that the Bank has made a turnaround by registering a net profit of Rs.95 crores in the last quarter,the first after seven consecutive quarters of losses.
Though the bank has reported an overall net loss of Rs.2316 crore last year 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 has also made a good ground in terms of NPA reduction and brought it down from 24.10 per cent to 16.48 per cent year on year basis and at the gross level and to 8.67 per cent at the Newt level.
The Bank has also received Capital infusion to the tune of Rs.4998 crores from the Central Government during FY-19 which in turn helped UBI improve its Capital Adequacy of 13.00 per cent.
