Economy

UBI frontloads provisions, posts record Rs 1531 crore loss

UBI frontloads provisions, posts record Rs 1531 crore loss”

"But we chose to front load it and made the entire provision in the second quarter", said Rajkiran Rai G, MD and CEO, Union Bank, while addressing the media.

The company has posted net loss of Rs.(1414.14) crores for the 6 months period ended September 30, 2017 as against net profit of Rs.342.99 crores for the 6 months period ended September 30, 2016.

The Provision Coverage Ratio of the bank stood at 55.25 per cent (Sept 2017) as compared to 50.41 per cent (Sept 2016), the lender said. "They [RBI] has given us a cushion of three quarters". The bank had an exposure of Rs. 7,044 crore in these 11 accounts.

Rai indicated that losses would have amounted to Rs 500 crore without the frontloading.

"We expect to be in the black in the fourth quarter... next quarter, some provision may be required for the second list of NCLT accounts", he said.

The lender said its total income in September quarter was at Rs 3,757.51 crore, down by close to 24 per cent from Rs 4,941.41 crore in same period past year. Union Bank has exposure to 18 accounts in this list.

Last month, the government had announced a Rs 2.11 lakh crore bank recapitalisation plan, of which Rs 76,000 crore will come through budgetary support and bank stake sales, and Rs 1.35 lakh crore as bonds.



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