Corona impact: Union Bank of India says profitability to be impacted in Q1 & Q2

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Published: June 19, 2020 12:20 AM

The lender has provided the disclosure after markets regulator Securities and Exchange Board of India (Sebi) asked companies to make detailed disclosures about the impact of the novel coronavirus pandemic on their businesses.

Union Bank of India, however, maintained that the bank was adequately capitalised to take care of current and future operations. Union Bank of India, however, maintained that the bank was adequately capitalised to take care of current and future operations.

Public-sector lender Union Bank of India on Thursday said its profitability in the June and September quarters may be impacted due to slower economic activity during the lockdown period amid the Covid-19 pandemic.

The lender has provided the disclosure after markets regulator Securities and Exchange Board of India (Sebi) asked companies to make detailed disclosures about the impact of the novel coronavirus pandemic on their businesses.

Bank of India had also disclosed earlier that its profitability would be impacted in the first half of financial year 2021.

Union Bank of India, however, maintained that the bank was adequately capitalised to take care of current and future operations. The bank also said it expected normalcy to be restored by third and fourth quarters of FY21. “Though there was an impact on recovery, loan default risk has been largely minimised on account of grant of moratorium,” Union Bank of India said. Reserve Bank of India (RBI) had granted moratorium to borrowers for three months from March 1, which was further extended till August 31 by the regulator.

Union Bank had provided moratorium to all its customers, unless a customer gave consent for paying instalments.

Bank of Baroda (BOB), another public-sector lender, had earlier disclosed that around 65% of its customers have opted for a loan moratorium. The largest lender, State Bank of India (SBI), had declared that only 21.8% customers had availed moratorium. SBI chairman Rajnish Kumar said 82% customers had paid two or more instalments during the lockdown.

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