Public sector lender Union Bank of India on Thursday reported a 30% year-on-year (y-o-y) decline in net profit at Rs 116 crore in the April-June quarter, owing to a 39% y-o-y rise in bad loan provisions to Rs 1,876 crore. Its asset quality deteriorated in the quarter, with gross non-performing assets (NPAs) as a percentage of total advances rising 146 basis points (bps) sequentially to 12.63%. In absolute terms, GNPAs stood at Rs 37,286 crore, while net NPAs stood at Rs 20,785 crore in Q1FY18.

Union Bank of India MD & CEO Rajkiran Rai G said the lender has exposure of Rs 7,400 crore to 11 accounts, among the 12 referred to the National Company Law Tribunal (NCLT). “We also have 10 more companies, who owe us Rs 1,400 crore, in the NCLT pipeline,” he said.

Meanwhile, the bank’s total slippages during the quarter stood at Rs 4,453 crore. “Of the total slippages in the June quarter, one borrower alone has loans close to Rs 1,000 crore,” Rai said. While he declined to disclose the name of the specific company, sources in the bank said that it was Videocon Industries.

The bank reported a total income of Rs 9,568 crore, up 7% y-o-y, of which interest income was Rs 8,153 crore. Net interest income (NII) – the difference between interest earned and interest expended – stood at Rs 2,243 crore, up 6.6% y-o-y. The bank’s domestic net interest margin (NIM) contracted 21 bps sequentially to 2.06% in Q1FY18.

“Our cost of deposits is not coming down as sharply as our yields on advances are, owing to the quicker transmission through the marginal cost of funds based lending rate (MCLR),” Rai explained. The lender’s current and savings account (CASA) ratio improved to 35.5% in Q1FY18 compared to 31.5% in the same quarter last year. Its total deposits rose 10.9% y-o-y to Rs 3.75 lakh crore during the June quarter, but fell 0.68% on a quarter on quarter basis.

Rai added that Union Bank of India’s board of directors have given an in-principle nod to sell a 40% stake in its wholly-owned asset management arm to Dai-ichi.