Moneycontrol
Aug 10, 2017 09:16 PM IST | Source: Moneycontrol.com

Union Bank to raise Rs 6,350 cr in FY18; to file 10 more cases to insolvency courts

Announcing its first quarter results on Thursday, the public sector bank's CEO and MD Rajkiran Rai G. said they have asked for Rs 1,500 crore capital from the government.

 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Union Bank of India plans to raise Rs 6,350 crore in the current fiscal year, of which includes Rs 2,000 crore through equity capital raising.

Announcing its first quarter results on Thursday, the public sector bank's CEO and MD Rajkiran Rai G. said they have asked for Rs 1,500 crore capital from the government.

On non-core assets, Rai said "We are not in a stage to encash our non core assets right now to shore up capital."

In the first quarter ending June 2017, Union Bank's net profit dipped 29 percent to Rs 116.5 crore on account of huge provisions  set aside towards bad loans.

During the quarter, it has made provisions of Rs 1875 crore against Rs 1346 crore a year ago.

Of the 12 large corporate accounts  I admitted at the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC), the bank has total exposure of Rs 7,460 crore in 11 of those accounts and they have made Rs 2,395 crore worth of provisions towards them.

These provisions would further increase as over the next three quarters, they will have set aside Rs 2,460 crore for the 11 accounts referred to the bankruptcy court on the directions from Reserve Bank of India.

The bank will further file 10 cases worth Rs 1,400 crore at the NCLT.

Giving an outlook on bad loans, Rai said, "It is difficult to predict the likely default. But we estimate the at most delinquencies could go up by 4 percent of the total advances."

In the first quarter, the bank saw slippages of Rs 4453 crore against Rs 3603 crore a year ago which led to sharp rise in provisions.

The total stressed loans of the bank's stood at around 13.94 percent, up from 13.06 percent in March and 12.86 percent a year ago.

The bank's net interest income of Rs 2,243 crore, up 6.7 percent and non interest income of Rs 1414 crore, up 36 percent from last year.
Sections
Follow us on
Available On