Union Bank of India on Tuesday reported a net profit of R444 crore in the March quarter, a 23% y-o-y fall...
Union Bank of India on Tuesday reported a net profit of R444 crore in the March quarter, a 23% y-o-y fall, owing to higher provisions.
While provisions for bad loans in Q4FY15 stood at R833 crore, up 24% y-o-y, total provisions stood at R1,209 crore, a rise of 63% from the same quarter last year.
Net interest margin shrunk in the fourth quarter on a y-o-y basis to 2.46% and saw a sequential decline of 11 bps. Net interest income — the difference between interest earned and interest expended — in the March quarter was up 3.4% y-o-y at R2,122 crore. The bank’s non-interest income was up 47.5% y-o-y at R1,143 crore in Q4FY15.
“The economy did not pick up as expected, and there was no demand for credit from corporates. We saw demand only from retail and MSMEs in FY15,” said Arun Tiwari, CMD, Union Bank, adding that the lender expects credit growth to be around 10-11% and deposit growth at 7% in FY16.
Asset quality saw sequential improvement in this quarter and gross non-performing assets (NPAs), as a percentage of gross advances, stood at 4.96%, down 12 bps sequentially. Gross NPAs in absolute terms were at R13,031 crore in the March quarter.
Union Bank restructured R2,368 crore of assets in Q4. Total advances increased 12.1% y-o-y to R2.62 lakh crore with retail, agriculture and MSMEs accounting for 49% of the total advances. Deposits rose 6.5% y-o-y to R3.16 lakh crore as on March 2015 and the share of current account and savings account (Casa) in total deposits was 29.2%.
The scrip rose 5.1% intraday on BSE, before closing at R143.55, up 2.35%.