Union Bank clocks Rs 155-cr net

Our Banking Bureau

Mumbai, May 17 : THE Union Bank Of India (Union Bank) has registered a 54 per cent growth in its net-profit to Rs 155 crore for the fiscal ended 2000-2001 from Rs 101 crore in the preceding fiscal. This was after providing Rs 106 crore as amortisation towards the bank’s voluntary retirement scheme (VRS). The thrust this year will be on housing loans and there are also plans for a a public issue this September, bank officials said. Total income grew by 12 per cent to Rs 4,044 crore while interest income improved by 12.6 per cent to Rs 418 crore.

Cost of deposits was brought down over the last two years to 7.57 per cent during the just ended fiscal year, down from the 8 per cent in 1999-2000 and 8.17 per cent in 1998-99. Spread improved to 3.43 per cent from 3.02 per cent with the yield on advances at 12.10 per cent and investment at 11.75 per cent. Said Union Bank’s chairman and managing director, V Leeladhar: “With interest rates sliding and competition for credit being severe, Union Bank has registered an excellent performance.”

Total advances of the bank grew by Rs 2,636 crore, close to 17 per cent to Rs 18,360 crore (Rs 15,724 crore). Deposits of the bank showed a growth of nearly 12 per cent to Rs 34,802 crore (Rs 31,105 crore). Housing finance loans were up by Rs 530 crore. Priority sector loans registered a growth of 25 per cent to Rs 6,760 crore from Rs 5,411 crore. Agriculture loans also increased by 21 per cent to Rs 2,051 crore, with export credit growing by 18 per cent to Rs 1,807 crore. The share of the priority sector increased to 45 per cent from 40 per cent of the adjusted net-bank credit last year, surpassing the stipulation of 40 per cent. The investment portfolio of the bank grew by 19.21 per cent to Rs 13,712 crore (Rs 11,501 crore).

The percentage of net non-performing assets (NPA) to net-advances came down to 6.87 per cent (7.97 per cent). Coverage of NPA’s through cumulative provisions was up to 41.3 per cent (34.9 per cent).

The bank proposes to increase the same to 50 per cent this fiscal. Under the scheme of one-time settlement, the bank settled 28,270 accounts amounting to Rs 1,521 crore. Capital adequacy stood at 10.86 per cent with the bank strengthening its Tier-2 capital with its 11.25 per cent aggressively priced, 63-month tenure Rs 100 crore bonds issue in February 2001. Over 4,300 employees opted for the VRS scheme implemented in December 2000 at a cost of Rs 530 crore.