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Corporate Results - Public Sector Banks
Money & Banking - Financial Performance
Union Bank net declines 30 pc on higher provisioning

Our Bureau


MR M.V. NAIR

Mumbai , July 20

Union Bank of India's net profit was 30 per cent lower at Rs 166.81 crore for the quarter ended June 30, against Rs 240.39 crore in the previous quarter, due to higher provisioning.

Total income was Rs 1,830.72 crore (Rs 1,491.45 crore). Net interest income was Rs 634.48 crore (Rs 534.72 crore). Other income was Rs 165.04 crore (Rs 133.69 crore). Total expenditure was Rs 1,404.24 crore (Rs 1,138.37 crore).

"The net profit is down because of higher provisioning, which has increased by 144 per cent," Mr M.V. Nair, Chairman and Managing Director, said.

Total provisioning up

The total provisioning increased to Rs 157.89 crore (Rs 64.69 crore). Capital Adequacy Ratio was 11.25 per cent (12 per cent). The proportion of net NPAs to total assets fell to 1.22 per cent (2.39 per cent). The bank saw a recovery of Rs 193 crore in the first quarter (Rs 129 crore) due to the robust credit monitoring system put in place to arrest slippage and help recovery, Mr Nair said.

Last year, the bank had an interest income from tax refund, which was not there this year. This too brought the revenues down, he said. Total deposits increased by 21.15 per cent to Rs 76,517 crore (Rs 63,158 crore). The share of low-cost CASA deposits (current account and savings account) increased to 33.62 per cent of total deposits against 32.37 per cent last year. Total advances grew by 34.09 per cent to Rs 55,802 crore from Rs 41,615 crore. Retail advances grew by 38.07 per cent, agricultural advances grew by 30.17 per cent and infrastructure lending grew by 33.68 per cent.

The cost of deposits increased to 4.96 per cent (4.89 per cent). Yield on advances improved to 8.46 per cent (8.3 per cent). The yield on investment declined to 7.61 per cent (7.89 per cent) due to market trends, Mr Nair said.

Focus on SME, retail

Going ahead, Union Bank plans to improve its CASA deposits share and focus on high-yielding advances such as SME and retail. The bank also plans to focus on non-interest income and improve recovery by monitoring accounts of above Rs 10 lakh, he said.

Shares of Union Bank ended at Rs 88.35, against the previous close of Rs 84.15, on the Bombay Stock Exchange on Thursday.

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