Union Bank of India posted a 108% year-on-year (y-o-y) rise in net profit during the April-June quarter, riding on strong loan growth and an improvement in asset quality. The bank posted a net profit of Rs 3,236 crore in the quarter under review, up 16% on a sequential basis.
The bottom-line was aided by a growth in advances, especially on retail, agriculture, micro, small and medium-sized enterprises (RAM) segment.
RAM advances rose 14.9% y-o-y to Rs 4.4 trillion as on June 30. Separately, retail loans rose 16.5% y-o-y to Rs 1.6 trillion as on June 30. Overall, domestic advances rose 11.8% y-o-y to Rs 7.9 trillion as on June 30. Similarly, global advances rose 12.3% y-o-y to `8.2 trillion as on June 30. Overall deposits rose 13.6% y-o-y to Rs 11.3 trillion.
Net interest income, the difference between interest earned and interest expended rose 16.6% y-o-y to Rs 8,840 crore in the quarter. Total deposits saw a 13.6% rise y-o-y to Rs 11.3 trillion as on June 30.
While low-cost current account savings account (CASA) deposits rose 7.2% y-o-y, retail term deposits of below Rs2 crore fell 0.6% y-o-y. CASA ratio fell to 34.60% as on June 30 from 36.20% a year ago.
The bank’s net interest margin rose to 3.13% in the June quarter from 3% a year ago. It was at 2.98% in January-March.
The state-owned bank witnessed an improvement in asset quality in the quarter under review. Gross non-performing asset ratio fell to 7.3% as on June 30 from 10.2% a year ago. Net non-performing asset ratio fell to 1.58% as on June 30 from 3.31% a year ago.
Credit cost fell to 0.97% as on June 30 from 2.02% a year ago. The bank also witnessed an improvement in capital, with common equity tier-1 ratio rising to 12.34% as on June 30 from 10.68% a year ago.