Public sector lender Union Bank of India reported a 14% year-on-year (YoY) increase in net profit at Rs 3,678.9 crore for the first quarter of the current financial year, aided by a healthy growth in advances.

Net interest income, the difference between interest earned and paid, rose 7% to Rs 9,412 crore during the June quarter against Rs 8,839.7 crore in the corresponding quarter of the previous fiscal. Its net interest margin (NIM) fell to 3.05 % in first quarter of current fiscal, from 3.13 % in the same quarter of the previous fiscal.

“For advances we have a guidance of 11% to 13% and for deposits our guidance is 9% to 11%,” A Manimekhalai, MD & CEO, Union Bank of India, said in the earnings press conference. She added that the bank is comfortable on the liquidity front and has an excess statutory liquidity ratio (SLR) that will help the bank to meet additional demand for loans. “The liquidity position of the bank is quite comfortable and we have excess SLR to the tune of almost Rs 65,000 crore,” she said.

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Gross advances of the bank increased by 11.46% year-on-year to Rs9.1 trillion as of June 30, 2024. Advances in RAM (retail, agriculture, MSME) segment of the bank increased by 14.53% year-on-year, where 12.28% growth was witnessed in retail, 23% growth in agriculture and 7.21% growth in MSME advances was seen on a year-on-year basis. Total deposit of the bank reached Rs 12.24 trillion as on June 30, as against Rs 11.28 trillion as on June 30, 2023.

Gross non-performing assets (NPA) ratio of the banks declined to 4.54% as on June 30, as compared to 4.76% in a quarter-ago period and 7.34% in a year-ago period. Net NPA ratio of the lender eased to 0.90% as on June 30, as against 1.03% in a quarter-ago period and 1.58% in a year-ago period.