Tuesday, September 8, 2009

United Bank of India’s Make-or-Break Year

2009-10 will go down in United Bank of India’s history as the year that this Kolkata-based bank finally made it big. Or, the year in which it slipped further.

FY 09-10 will be a tumultuous year for United Bank of India, that poses challenges like recapitalization, capital restructuring, NPA management, and their initial public offer (IPO).

At 1.7%, United Bank of India has one of the highest gross non performing assets (NPA) among all PSBs, and United Bank’s recapitalization is a complicated process that involves capital restructuring too to make the bank look better in the IPO market. However, the last public sector banking IPO of 2008-09 was a disaster and so was the first public sector unit IPO of this year.

United Bank of India has also come under fire for the pathetic performance of one of its sponsored regional rural banks (RRB) – Manipur Rural Bank – which has the worst gross NPA at 40.35%.

It remains to be seen whether there will be takers to Chairman & Managing Director SC Gupta’s promise to double the business within the next three years.

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