Union Bank of India's net profit falls 12.6% as provisions rise
2 min read . Updated: 22 Aug 2020, 12:27 PM ISTThe bank posted a net profit ₹333 crore for the three months ended 30 June, against ₹381 crore in the year-ago period
Mumbai: Union Bank of India on Friday said its first-quarter net profit dropped 12.6% on the back of lower other income and higher provisioning.
In its investor presentation, the bank provided comparable numbers consolidating those of Andhra Bank and Corporation Bank with its own financials when they were separate entities. These three banks merged on 1 April and the June quarter numbers reflect the financials of the amalgamated entity.
The bank posted a net profit ₹333 crore for the three months ended 30 June, against ₹381 crore in the year-ago period. A Bloomberg poll of three analysts had estimated a loss of ₹1,540.30 crore. On a consolidated basis, these banks reported a net loss of ₹7,157 crore in the March quarter.
Its provisions during the quarter rose 4.6% to ₹3,701 crore, from ₹3,538 crore a year ago. During the January-March quarter, the bank (consolidated) had set aside ₹10,847 crore in provisions.
Union Bank’s net interest income, or the difference between interest earned on loans and that paid on deposits, grew 17.1% to ₹6,403 crore, against ₹5,468 crore in the corresponding period last year.
The bank’s other income, including core fee income, fell 22.9% to ₹1,462 crore in the three months to June 2020, from ₹1,897 crore a year ago.
Its gross non-performing assets (NPAs), as a percentage of total advances, were at 14.95% in the June quarter, compared with 14.59% in the March quarter of FY20, and 15.59% in the year-ago period.
The bank’s net NPA ratio was at 4.97% in Q1 FY21, against 5.22% in the January-March quarter and 6.47% in the year-ago quarter.
On Friday, shares of the bank rose 1.84% to close at ₹30.45 on the BSE, while the Sensex gained 0.56% to close at 38,434.72 points.
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