Union Bank Of India Q1 Results: Profit More Than Doubles, Provisions Drop
The bank's net profit for the quarter has more than doubled from last year and stands at Rs 3,236 crore.
Public sector lender Union Bank of India saw its April-June net profit rise due to higher core income and significantly lower provisions.
The bank's net profit for the quarter stood at Rs 3,236 crore, up 107% year-on-year. Analysts polled by Bloomberg estimated a Rs 2,343 crore net profit for the quarter.
Net interest income, or core income, for the bank rose 16.5% from a year ago and stood at Rs 8,839 crore. Other income, too, rose 38.5% year-on-year to Rs 3,903 crore.
The gross non-performing asset ratio for the bank fell by 19 basis points sequentially to 7.34%. Similarly, net NPA improved to 1.58% as of June 30, compared with 1.7% as of March 31.
Provisions for the quarter fell sharply by 38.9% year-on-year to Rs 2,005 crore.
Business Growth
Union Bank of India's total advances registered a growth of 12.33% year-on-year and stood at Rs 8.18 lakh crore. Deposits, on the other hand, grew by 13.63% year-on-year and stood at Rs 11.28 lakh crore.
Low cost current account and savings account deposits grew by 7.17% year-on-year and stood at Rs 3.85 lakh crore, as of June 30. Union Bank of India's ratio of CASA deposits to overall deposits fell 160 basis point to 34.6%. As per its forward looking guidance, Union Bank of India expects advances and deposits to grow by 10-12% and 8-10%, respectively.
Among advances, the retail segment grew the fastest at 16.47% year-on-year followed by MSME lending at 14.88%, agriculture at 13.37%, and large corporate and others at 9.40%.
Infrastructure lending accounted for 12.9% of the bank's overall advances as of June, with power being the largest category.
Union Bank of India's net interest margin expanded by 13 basis points year-on-year and stood at 3.13%, as of June 30.
Union Bank of India's stock closed 2.35% higher on Thursday, with shares changing hands for Rs 87.05 apiece. The benchmark Nifty Bank index also ended the day higher by 1.09%.