New Delhi [India], June 7 (ANI): Union Bank of India (UBI) on Monday said it will pick stake in the National Asset Reconstruction Company Ltd (NARCL) and has identified Non Performing Assets (NPAs) worth Rs 7,800 crore to be transferred to the proposed bad bank for resolution.
Bad bank refers to a financial institution that takes over bad assets of lenders and undertakes resolution.
NARCL is being formed by all the banks and some of the NPA advances will be transferred to that ARC for recovery. NARCL is likely to be operational by July 1.
"We will take nine per cent stake in NARCL and have identified NPAs worth Rs 7800 crore to be transferred in NARCL," UBI Managing Director and CEO Rajkiran Rai G said.
He said that bad loans of around Rs 2 lakh crore will be transferred to NARCL in tranches by public sector banks.
Rai hoped that his bank will hopefully able to close the deal of stake sale of insurance company India First Life Insurance where it holds 30 per cent share and is the second-largest partner.
Bank of Baroda holds 44 per cent and Carmel Point Investments India Pvt Ltd holds a 26 per cent stake in India First Life Insurance Company.
Rai said that the bank is in the process to close it is 750 branches after its amalgamation with Andhra Bank and Corporation Bank of India.
"We are in completion of closing our 400 branches. We have not retrenched single staff due to closure of branches as we adjusted our staff in nearby offices and shifted some staff in various departments," Rai said.
Earlier announcing the results, Rai said that the operating profit of the Bank improved by 40.38 per cent during Q4 FY21 as compared to Q4 FY 20 and 6.54 per cent on a YoY basis during FY 21. Net Profit for FY21 stood at Rs 2,906 crore against a net loss of Rs 6,613 crore for FY20. Net interest income of the bank grew by 4.37 per cent YoY during FY21.
The CASA deposits have increased by 13.15 per cent YoY. Total deposits base stood at Rs 9,23,805 crore as at the end of Q4FY21. CASA ratio improved to 36.33 per cent from 34.15 per cent a year ago, Rai said.
He said that the bank registered 10.49 per cent growth in retail, 11.89 per cent growth in agriculture, 3.24 per cent growth in MSME advances.
Average advances have grown by 3.11 per cent YoY. Domestic advance including CP and Corporate Bonds has grown by 1.13 per cent YoY.
"Slippages during FY21 have reduced by 30.63 per cent as compared to FY20 (from Rs 25,147 crore during FY20 to Rs 17443 Crore during FY 21). Net NPA of Q4FY21 stood at 4.62 per cent," he said. (ANI)