State-run lender Union Bank of India on Tuesday said that its net loss had widened to Rs 3,370 crore in the fourth quarter of 2018-19, primarily due to the higher provisioning requirements on account of non-performing assets.
The bank’s figures for the quarter ended March 31, 2019, are less encouraging than its performance in both the third quarter of FY19 and the last quarter of FY18. In the quarter ended December 2018, UBI had posted a net profit of Rs 153.21 crore while it had recorded a net loss of Rs 2,583.38 crore in the last quarter of the previous financial year. Its total income in the quarter ended March 2019 stood at Rs 9,621.01 crore, up from Rs 9,596.86 crore recorded in the same period of 2017-18.
The bank’s woes in the last quarter of FY19 come primarily on account of its asset quality and required provisioning. However, asset quality has improved compared to the same period of the previous year. Gross non-performing assets (NPAs) at the end of March 2019 stood at 14.98 per cent of gross advances against a whopping 15.73 per cent as of March 31, 2018. Net NPAs also fell from 8.42 per cent last year to 6.85 per cent now.
According to the figures disclosed by the bank, bad asset quality has pushed the bank to make a provision of whopping Rs 5,783.09 crore for the March quarter, slightly higher when compared to Rs 5,638.57 crore in the same period of the previous year. But, UBI’s provision coverage ratio as at the end of the quarter has improved substantially at 66.24 per cent, against 57.16 per cent a year ago.
Meanwhile, for the entire financial year 2018-19, UBI has managed to nearly halve its losses, reporting a consolidated net loss of Rs 2,922.35 crore against Rs 5,212.47 crore loss in 2017-18. Total income during stood at Rs 39,355.38 crore, up from Rs 38,413.6 crore a year ago.
The bank has also reported a divergence in gross NPAs reported of Rs 867 crore during the financial year 2017-18, as part of the central bank’s risk supervision norms. Divergence in net NPAs stood at (-)Rs 1,414 crore and divergence in provisioning stood at Rs 2,281 crore. Consequently, the adjusted net loss for financial year 2017-18 came in at Rs 6,770 crore.
The bank’s global net interest margin (NIM) for FY19 improved to 2.23 per cent against 2.07 per cent for FY18. Domestic NIM improved to 2.28 per cent compared to 2.17 per cent for FY 2017-18.