Union Bank of India’s consolidated net profit jumps 183% to Rs 1,510 cr in Sept quarter

By: |
November 02, 2021 8:31 PM

The lender's net profit had stood at Rs 533.87 crore in the corresponding quarter last year, according to a BSE filing.

Union-Bank-of-India-1200The bank's shares on Tuesday gained six per cent to close at Rs 49.45 apiece on the BSE

State-owned Union Bank of India on Tuesday reported a 183 per cent jump in its consolidated net profit to Rs 1,510 crore for the September 2021 quarter, primarily driven by recovery from the DHFL account that was written off earlier. The lender’s net profit had stood at Rs 533.87 crore in the corresponding quarter last year, according to a BSE filing.

The bank’s core net interest income grew 8.52 per cent to Rs 6,829 crore on a loan growth of about three per cent and an expansion in net interest margin to 2.95 per cent as against 2.78 per cent in the year-ago period.

The non-interest income during July-September 2021 grew 65.32 per cent to Rs 3,978 crore, mainly on the back of a Rs 1,764-crore recovery in written-off accounts.

Speaking to reporters, its Chief Executive and Managing Director Rajkiran Rai G said the overall recoveries are Rs 5,341 crore, out of which Rs 1,650 crore came from DHFL recovery alone, which helped the profit.

The bank is witnessing healthy loan growth on the retail and agriculture side but the corporate uptick is sluggish, he said adding that it is targeting to end FY22 with a loan growth of up to eight per cent. Its gross non-performing assets ratio came down to 12.64 per cent at the end of September 2021, against 14.71 per cent a year ago.

The fresh slippages stood at Rs 6,745 crore, of which around Rs 2,600 crore came from entities linked to Srei Group, said Rai adding that it has taken a 65 per cent provision on the exposure to the troubled NBFC.

The overall provisions were down to Rs 3,273 crore as against Rs 4,242 crore. Rai said there was a write-back in case of DHFL but the money set aside for Srei increase in pensions was almost the same as the benefit. For the second half of the financial year, the bank is targeting to contain the slippages within Rs 4,000-5,000 crore, Rai said. He added that the restructured assets of three per cent can also be taken care of with the operating profits going ahead.

Having done recoveries of Rs 10,000 crore in the first half, the bank also upped its overall target for recoveries for FY22 to Rs 16,000 crore from the earlier Rs 13,000 crore, Rai said. The overall capital adequacy stood at 13.64 per cent as of September 30, including 10.16 per cent in core capital.

On a standalone basis, the bank’s net profit reported a nearly three-fold jump to Rs 1,526.12 crore in the September 2021 quarter, as compared with a net profit of Rs 516.62 crore in the corresponding quarter last year. The bank’s shares on Tuesday gained six per cent to close at Rs 49.45 apiece on the BSE.

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