Public sector lender Union Bank of India reported a significant 34% year-on-year (YoY) increase in net profit, reaching Rs 4,720 crore for the second quarter of the current financial year, driven by robust growth in advances.
Net interest income, defined as the difference between interest earned and interest paid, remained flat at Rs 9,047 crore during the September quarter, compared to Rs 9,126 crore in the corresponding quarter of the previous fiscal year. The bank’s non-interest income grew by 44% during the quarter. Additionally, its net interest margin (NIM) declined to 2.9% in the first quarter of the current fiscal year, down from 3.18% in the same quarter of the previous fiscal year.
Domestic advances of the bank increased by 9% year-on-year, reaching Rs 8.9 lakh crore as of September 30, 2024. Advances in the RAM (Retail, Agriculture, MSME) segment rose by 12% year-on-year, with retail witnessing a 14% growth, agriculture growing by 16%, and MSME advances increasing by 5% on a year-on-year basis. Total deposits of the bank grew by 9%, reaching Rs 12.41 lakh crore as of September 30, 2024, compared to Rs 11.37 lakh crore as of September 30, 2023.
The lender improved its asset quality, with the gross non-performing assets (GNPA) ratio declining to 4.36% as of September 30, compared to 4.54% in the previous quarter and 6.38% a year earlier. The net NPA ratio also eased to 0.98% as of September 30, down from 1.30% in the same period last year.
