Union Bank of India posts Rs 153-crore net

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Published: January 22, 2019 12:22:52 AM

Union Bank of India reported a profit for the third consecutive quarter on Monday, posting a net profit of Rs 153 crore for the quarter ended December against a loss of Rs 1,250 crore for the corresponding quarter a year ago.

Union Bank of India posts Rs 153-crore net

Union Bank of India reported a profit for the third consecutive quarter on Monday, posting a net profit of Rs 153 crore for the quarter ended December against a loss of Rs 1,250 crore for the corresponding quarter a year ago.

Aiding the bottomline was a drop in overall provisioning costs, of which provisioning against non-performing assets dropped over 15% on-year to `2,139 crore. The bank hopes to carry on its “consistent performance over the last three quarters”, MD & CEO Rajkiran Rai said at a post-earnings press conference.

The bank’s asset quality also fared well, with gross non-performing assets (NPAs) falling 8 bps on a sequential basis to 15.66% of the loan book at the end of December while net NPAs fell 15 bps sequentially at 8.27%.

Fresh slippages during the quarter were at `2,983 crore, of which a large chunk came out of medium and large enterprises, which came in at 1,580 crore.

Meanwhile, about `1,800 crore of the state-run lender MSME loan book is currently categorised as SMA-2 and which could be eligible for the Reserve Bank of India’s latest scheme permitting a one-time restructuring of existing loans to MSMEs that are in default but ‘standard’ as on January 1. However, Rai added a final number can only be computed once the viable portions of the exposures are determined.

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The bank’s recovery from written-off accounts improved to `244 crore for the quarter ended December against `121 crore for the same period last year. Seperately, the bank sold as much as `380 crore of stressed accounts to asset reconstruction companies during the last quarter.

The bank has an exposure to 23 accounts from the RBI’s first and second list of stressed accounts referred under the IBC code. So far this year, the bank has managed to recover `1,300 crore through settlement of five large select cases under the bankruptcy court. Next quarter, Rai believes, the bank could manage to recover as much as `4,000 crore through settlements on a few accounts, but refrained from naming any.

On being asked about its exposure to Essar Steel, Rai said the bank was expecting a resolution by this quarter-end but added, “all options are open.” Separately, the lender’s total fund-based exposure to IL&FS stands at `1,100 crore. Its exposure to IL&FS subsidiaries is small though almost `100 crore of which, largely its exposure to a thermal power plant, slipped last quarter, Rai said. The bank has already provided almost `20 crore as provisions against this fresh slippage.

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