Bombay: Union Bank of India, a state-owned company, restructured retail loans of ₹So far, 6,557 crore or 5.2% of its retail loan portfolio under the two tranches of the Reserve Bank of India’s (RBI) Covid-19 relief window, its chief executive Rajkiran said on Thursday. Rai G.
While the first installment of these one-off redesigns has already been completed, the second phase of the program is active until September 30. The bank’s personal loan portfolio amounted to ₹1.25 trillion as of June 30.
“As part of resolution 1.0, we have restructured ₹11,965 crores. This side ₹3,702 crore came from personal loans, ₹2,427 crore came from micro, small and medium enterprises (MSMEs) and ₹5,836 crore came from large companies, â€Rai told reporters.
Rai added that under resolution 2.0, the bank’s total overhauls were ₹3,962 crore until June 30. This time, personal loans were at ₹2,855 crores and ₹954 crore was from MSME while the rest was from agriculture as large companies are not eligible this time around.
“It’s still open for three months. We expect retail and MSMEs together, we will do another ₹2000 crore of restructuring in the second quarter, â€said Rai.
Like its peers, the Union Bank of India has also seen stress build up among small borrowers, including MSMEs. The slippages in personal loans were at ₹1,078 crore and another ₹3,139 crore of small businesses.
“Of the slippages in the first quarter, almost 45% came from the MSME sector, the most affected during the covid-19 wave. We are very confident with the type of restructuring and the facilities of the Emergency Line of Credit Guarantee Program (ECLGS) that the stress will ease. This year we gave a screening of ₹13,000 crore in recoveries and upgrades. It was around ₹4,300 crore in the first quarter and we believe the goal for the entire year is achievable, â€said Rai.
He explained that the stress was mainly due to covid-19 and that the equivalent monthly payments (EMI) were affected. Most of the stress in retail, he said, was already covered in the June quarter and we don’t see much in the September quarter.
The bank more than tripled its stand-alone net profit year-over-year (year-over-year) to ₹1,181 crore in the three months to June thanks to lower spending and higher other income.
“The bank’s performance has stabilized and we have seen a substantial improvement. After almost three to four quarters, we saw a normal quarter on the business side. Even though we lost the first two months, but in June it stabilized, “Rai added.
Union Bank of India shares on BSE closed at Rs37.95 on Thursday, up 6.9% from its previous close.
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