State-run lender Union Bank of India (UBI) today posted 57 per cent jump in the September quarter net at Rs 554 crore, helped by improved asset quality.
The city-headquartered bank had posted a post-tax profit of Rs 353 crore for the corresponding period last fiscal.
Total income rose to Rs 6,655 crore from the Rs 5,611 crore a year ago, while the core net interest income was up by only 11.38 per cent to Rs 1,850 crore.
The non-interest income component rose to Rs 546 crore from the previous year's Rs 501 crore.
The bank's net interest margin slipped to 3.02 per cent from 3.21 per cent and chairman and managing director D Sarkar said the bank will continue to hold it above 3 per cent in the coming quarters.
Sarkar said the bank's additional provisions dropped to Rs 792 crore as against the Rs 1,821 crore in the year ago period due to focus on the asset quality, which helped it reduce the provisioning on non-performing assets to Rs 354 crore from the Rs 495 crore y-o-y.
The gross non performing assets ratio increased to 3.66 per cent from 3.49 per cent in the year ago period and Sarkar said the bank will strive to get it to 3 per cent level.
Reacting to the results, the bank's share jumped 8.14 per cent to close at Rs 223.25 a piece on the BSE, whose 30-share benchmark ended trade with a 1.04 per cent jump.
Its share of the low-cost Casa (current and savings accounts) deposits was almost flat at 30.50 per cent, resulting in the margin erosion.
The total capital adequacy declined to 11.39 per cent from the year ago's 12.54 per cent. The core tier-I capital share also dipped to 8.17 per cent compared to 8.54 per cent.
Sarkar said the bank sought Rs 950 crore infusion from the government this fiscal which will take the total capital adequacy to above 9 per cent.
On branch expansion, Sarkar said it is targeting to take the total domestic branches to 3,500 from the current around 3,300 and the ATMs to 5,000 from the current 4,185 by end of the fiscal.
Additionally it has received an in-principle approval to open a branch in the Dubai International Finance Centre and is also hopeful of branches in Sydney, Antwerp and entering through a subsidiary registered in London, Sarkar said.