Union Bank of India reported a 53.81% year-on-year growth in net profit to R303 crore for the October-December quarter. Union Bank chairman and managing director D Sarkar said the uptick in profit was owing to a low base effect, as the previous year profit was affected by larger provisions on restructured assets. Union Bank provided R91 crore for restructured assets compared with R361 crore in the same quarter of the previous year.
The net interest margins dipped 7 basis points to 2.95%. Sarkar said weaker NIMs were due to rate cuts in agriculture, housing and SME loans, along with the cost of funds remaining high.
Asset quality showed improvement with gross NPA sequentially falling to 3.36% and net NPA falling from 2.06% to 1.7%. The bank saw lower slippages in the quarter which stood at R677 crore compared with R792 crore in the previous quarter. Restructured assets to the tune of R1,205 crore and has forecasted further recasts of R1,700 crore in the January to March quarter.
The net interest income (NII) was up 9.88% yoy to R1,891 crore.