Union Bank of India Q1 profit falls 68% to Rs 167 cr on high provisioning

By: |
New Delhi | August 6, 2016 9:58 PM

State-run Union Bank of India (UBI) today reported 68 per cent fall in net profit to Rs 167 crore in the first quarter ended June 30, on higher provisions for bad loans.

Union Bank of India, NPA, net profitState-run Union Bank of India (UBI) today reported 68 per cent fall in net profit to Rs 167 crore in the first quarter ended June 30, on higher provisions for bad loans.

State-run Union Bank of India (UBI) today reported 68 per cent fall in net profit to Rs 167 crore in the first quarter ended June 30, on higher provisions for bad loans.

The bank had reported a profit after tax of Rs 519 crore in the same period last year.

“The degrowth in profit was on account of increase in provisions,” bank’s chairman and managing director Arun Tiwari told reporters here today.

The provision for bad loans increased to Rs 1,347 crore in the quarter from Rs 479 crore in the same period last year.

Domestic net interest margin of the bank declined to 2.36 per cent from 2.46 per cent. Global NIM also decreased to 2.28 per cent from 2.39 per cent last year.

Tiwari said margins is likely to be in the range of 2.4-2.5 per cent by the end of this financial year.

The bank’s asset quality worsened in the April-June quarter with gross non-performing assets doubling to 10.16 per cent from 5.53 per cent in the year-ago period.

Net NPAs stood at 6.16 per cent against 3.08 per cent.

“The GNPA numbers have peaked and we will see decline in numbers going ahead. We expect to exit this fiscal with GNPAs at 8.5-9 per cent,” Tiwari said.

The bank saw Rs 3,603 crore fresh loans slipping into NPA category in the quarter.

It sold one NPA account of Rs 47 crore to an asset reconstruction company in Q1.

The upgradation was at Rs 141 crore and it wrote off Rs 2 crore worth of loans.

Cash recoveries more than doubled to Rs 350 crore from Rs 160 crore.

The bank has one account in pipeline worth Rs 150 crore to be refinanced under 5/25 scheme.

Domestic deposits increased by 3.9 per cent to Rs 3,34,538 crore as of June 30, 2016, from Rs 3,22,026 crore as of June 30, 2015.

Domestic advances rose 4.7 per cent to Rs 2,42,935 crore from Rs 2,32,072 crore.

Tiwari said the bank is aiming at a credit growth of 9-10 per cent and deposit growth of 6-7 per cent this year.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Banks to remain closed on April 14 in these cities, open in these 7 states; check full list
2RTGS to remain unavailable for 14-hr on Sunday due to technical upgrade
3Sebi slaps Rs 25 crore fine on Yes Bank in AT-1 bonds case