Public-sector lender Union Bank of India on Friday reported an 8.3% year-on-year rise in its net profit for the March quarter to Rs 1,440 crore on the back of a strong growth in net interest income (NII).
The lender’s NII – the difference between interest earned and interest expended – stood at Rs 6,769 crore, up 25% YoY. The net interest margin (NIM) fell 25 basis points (bps) sequentially to 2.75%. The operating profit rose 11% YoY to Rs 5,520 crore.
Gross advances grew 9.6% to Rs 7.16 trillion at the end of March 2022, with gold loans, which grew over 18%, being a major driver. The lender’s current and savings account (CASA) ratio rose to 36.54% in the quarter under review from 36.33% in the same quarter last year. Its total deposits rose 11.75% to Rs 10.32 trillion.
Provisions fell 2% YoY to Rs 3,618 crore. The bank showed an improvement in terms of asset quality. Gross non-performing assets (NPAs) as a percentage of total advances fell 51 bps on a sequential basis to 11.11% and the net NPA ratio declined 41 bps to 3.68%.
The value of slippages during the March quarter stood at Rs 5,672 crore, higher than Rs 3,411 crore in the quarter ended December. Recoveries improved to Rs 1,896 crore in Q4 from Rs 1,343 crore in Q3.
Shares of Union Bank on Friday closed at Rs 36.2 on the BSE, up 7.42% from the previous close.