Kolkata-based public sector banks (PSBs), namely, the United Bank of India (UBI), the Allahabad Bank and the UCO Bank are improving their performance. UBI has started to earn profit from the fourth quarter of FY 19. In the first quarter of the present FY, UBI and Allahabad Bank have earned profits. UBI has declared a net profit of `104 crore for the first quarter and for Allahabad Bank, it has been ` 128 crore.
Although the UCO Bank has reported a net loss of ` 601.45 crore in the June quarter of this FY, it has been improving its financial position. Its operating profit has increased by 1.63% to reach ` 1201.44 crore as compared to the same period of the last year. Net Interest Income and other income have also been improving. At the same time, its total business improved by 5.69% as compared to the first quarter of FY 19 as it reached to ` 310810.61 crore as on the end of June 2019. Its CASA deposits grew by 41.37%.
A. K. Goel, MD, UCO Bank has expressed confidence regarding a turn around by March 2020.
Allahabad Bank has been in a better position and has already come out of Prompt Corrective Action (PCA). Its deposit position is good as the rate of growth of CASA is one of the highest in the industry. CH.S.S. Mallikarjuna Rao, MD, Allahabad Bank said that the bank does not need any recapitalisation from the government at present. The bank has reduced its net NPA to 5.71% as on June 2019. The bank’s total business stands at ` 3,77,778 crore.
The UBI has been making profits for the last two consecutive quarters. Ashok Kumar Pradhan, MD, UBI expects that his bank can come out of PCA by September of this FY. Only Net NPA, a parameter for banks under PCA is a concern for the bank. Pradhan also said that the bank could not pass to its clients the full benefit of reduction of repo rate (the rate at which RBI gives short term loans to commercial banks) because the bank had to fix its interest rate according to MCLR of the bank. To calculate this, the bank considers many factors like cost of deposit, already agreed interest rates of the clients and operating costs.