Union Bank Of India Q2 Results: Profit Up 34% On Lower Provisions

Fall in provisions helped Union Bank of India to report a 34% year-on-year rise in standalone net profit in the second quarter of the current financial year.

The public sector bank's bottom line of Rs 4,720 crore also beat the consensus estimate of Rs 3,789 crore by analysts polled by Bloomberg. Sequentially, the profit after tax grew 28%.

Provisions and contingencies fell nearly 9% annually and over 17% sequentially to Rs 3,393 crore, according to an exchange filing on Monday.

Net interest income fell 0.9% annually and 4% sequentially to Rs 9,047 crore. The net interest margin also compressed to 2.9% from 3.05% a quarter ago and 3.18% a year ago.

Loan growth of the bank remained healthy at Rs 8.94 lakh crore, up 9% annually and 2% sequentially. Deposits grew 9% year-on-year and over 1% quarter-on-quarter to Rs 12.4 lakh crore. CASA ratio was 32.72% at the end of September against 33.4% a quarter ago and 34.66% a year ago.

Asset quality of the bank showed mixed trends, with the gross non-performing assets ratio falling to 4.36% from 4.54% a quarter ago and 6.38% a year ago. However, the net bad loan ratio was at 0.98% as compared to 0.90% a quarter ago and 1.3% a year ago.

Slippage ratio of the bank increased to 2.4% at the end of September from 1.08% a quarter ago and 1.39% a year ago.

Credit costs of the state-owned bank rose by 36 basis points sequentially and 28 bps annually to 1.09%.