Union Bank net profit jumps 195% as non-interest income surges

By: |
November 03, 2021 3:15 AM

Non-interest income surged 65% year on year (YoY) to Rs 3,978 crore. The bank reported a total income of Rs 20,684 crore, up 2.5% YoY. Net interest income (NII) – the difference between interest earned and interest expended – stood at Rs 6,829 crore, up 8.5% YoY.

Union Bank's shares on the BSE closed at Rs 49.45 on Tuesday, up 6% from their previous close.Union Bank's shares on the BSE closed at Rs 49.45 on Tuesday, up 6% from their previous close.

Public sector lender Union Bank of India on Tuesday reported 195% year-on-year (y-o-y) growth in net profit to Rs 1,526 crore during the September quarter of the current financial year on the back of a jump in non-interest income and lower provisions.

Non-interest income surged 65% year on year (YoY) to Rs 3,978 crore. The bank reported a total income of Rs 20,684 crore, up 2.5% YoY. Net interest income (NII) – the difference between interest earned and interest expended – stood at Rs 6,829 crore, up 8.5% YoY. The bank’s net interest margin (NIM) fell 13 basis points (bps) sequentially to 2.95% in Q2FY22.

Provisions fell 12% YoY to Rs 3,274 crore. Union Bank’s operating profit rose 26% YoY to Rs 6,074 crore.

The bank showed an improvement in terms of asset quality. Gross non-performing assets (NPAs), as a percentage of total advances, fell 96 bps on a sequential basis to 12.64% and the net NPA ratio declined eight bps to 4.61%. In absolute terms, GNPAs stood at Rs 80,211 crore, while net NPAs stood at Rs 26,785 crore in Q2FY22.

The value of slippages during the September quarter stood at Rs 6,745 crore, down from Rs 7,049 crore in the quarter ended June. Recoveries rose to Rs 1,466 crore in the quarter under review from Rs 1,147 crore in Q1.

Gross advances shrank 2.5% YoY to Rs 6.35 lakh crore at the end of September 2021. The lender’s current and savings account (CASA) ratio rose to 37.16% in Q2FY22 from 34.61% in the same quarter last year. Its total deposits rose 3.15% YoY to Rs 9.14 lakh crore at the end of the September quarter.

Union Bank’s shares on the BSE closed at Rs 49.45 on Tuesday, up 6% from their previous close.

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