At Rs 371 crore, Union Bank net up 78%

Written by fe Bureau | Mumbai | Updated: Nov 1 2014, 05:45am hrs
Helped by a 32% rise in non-interest income, the Union Bank of India on Friday reported a R371-crore net profit for the three months to September 2014, a y-o-y rise of 78.4% from R208 crore in the year-ago period.

Its provisioning for bad loans stood at R603 crore, a sequential rise of more than 41% from R426 core.

The banks net interest margin (NIM) marginally contracted in this quarter on a year-on-year (y-o-y) basis to 2.6% and also saw a sequential decline of 8 basis points (bps).

Net interest income (NII) the difference between interest earned and interest paid in the first quarter was up 6.7% to R2,085 crore; it was R1,954 crore in the same quarter last year.

The banks non-interest income rose to R811 crore from R611 crore in Q2 FY14. Owing to the challenging environment, there is negligible corporate lending for new projects. However, I'm optimistic that the scenario will change from Q4, said Arun Tiwari, chairman and managing director of the bank. He added that they expect credit growth to be 10-12% and deposit growth to be 9-10% in FY15.

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Asset quality of Union Bank suffered a setback this quarter: its gross NPA was R11,461 crore, up 12% from R10,231 in the same period last year. NPA ration was 4.69%, up 42 basis points (bps) from last year.

During the quarter under review, the bank restructured R941 crore of assets. Its total advances rose 10.3% year-on-year (y-o-y) to R2,44,411 crore from R2,21,684 crore in the September quarter of last financial year.