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Union
Bank Q2 net profit up 9.38% to Rs 37 crore
Our
Banking Bureau
Mumbai, Nov 5: Union Bank of India (UBI) has posted
a 9.38 per cent rise in net profit at Rs 37.32 crore for the
quarter ended September 2001. The net profit for the first
half of the year is at 100.35 crore, a 35 per cent jump from
the previous year’s first half.
Other income, which almost doubled to Rs 121.80 crore from
Rs 63.30 crore last year, was the major contributor to the
quarter’s profit.
| ...not in favour
of merger with IDBI |
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Our Banking Bureau
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Mumbai, Nov 5: Union Bank of
India is not in favour of a merger withIDBI.
UBI chairman and managing director V Leeladhar said, “The
bank was not finding any big synergies between the bank
and the FI for the new entity”. “The bank is fully-owned
by the government. It is the ultimate authority to take
any decision on the issue,” he added.
The first reason cited by Mr Leeladhar is that the bank
of that size (post-merger entity) should have foreign
presence. Neither IDBI nor UBI has any foreign branch.
The other problem in case of a merger is the asset-liability
mismatch. UBI took three years to iron out its asset-liability
mismatch. “The merger would vitiate the asset-liability
mismatch, making it difficult to match them. IDBI has
only long-term assets, while we have only 30 per cent
of long-term assets in our portfolio,” Mr Leeladhar said. |
Announcing the results on Monday, UBI chairman
and managing director V Leeladhar said, “Other income has
doubled due to two reasons. One, income from sale of government
securities is up over 10 times to Rs 66.81 crore from Rs 6.12
crore last year, while the other is income from forex operations
at Rs 51 crore for the latest quarter is against Rs 43 crore
last year.”
Though the operating profit for the quarter was up by 24 per
cent to 181.82 crore, the growth in net profit has come down
due to higher provisions towards contingencies and taxes,
together accounting for Rs 144.50 crore against Rs 112.30
crore during the same period last year.
Interest earned also went up to Rs 991.29 crore from Rs 921.69
crore during the same quarter last year.
During the first half of the current fiscal, the bank has
reported a 9.7 per cent rise in its total advances at Rs 20,143
crore when compared to March 2001, primarily due to focus
on retail lending. Retail lending schemes have shown a growth
of Rs 470 crore (13.6 per cent) to the level of Rs 3,926 crore
in September from Rs 3,456 crore in March 2001.
“The bank is confident of achieving its target of Rs 24,000
crore set for the year against Rs 17,705 crore achieved last
year,” Mr Leeladhar said.
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