Union Bank of India posted a 16 per cent growth in the third quarter net profit helped by treasury gains and higher income from its retail loan portfolio.

The Mumbai-headquartered public sector lender posted a net profit of ₹349 crore in the three months period ended December 31, 2013 against ₹302 crore, a year ago.

The bank said the growth was due to its focus on the retail, agriculture and micro, small and medium enterprises businesses. Total income rose 18 per cent to ₹8,230 crore. Total deposits grew 19 per cent to ₹2,85,125 crore, while total advances increased 20 per cent to ₹2,27,745 crore.

Revenue from treasury operations increased to ₹2,173 crore against ₹1,729 crore, a year ago.

The bank’s gross non-performing loans (NPA) increased to ₹ 8,776 crore (₹6,384 crore, a year ago). As a percentage of total loans, gross NPA’s grew to 3.85 per cent from 3.36 per cent, a year ago.

Arun Tiwari, Chairman and Managing Director, said the majority of the NPA’s have come from the textile and iron and steel sector.

The bank said it will continue to focus on growing business in the retail, MSME and agriculture segments.

Tiwari said the margins of the bank will remain stable at around 2.50 per cent in the foreseeable future. The bank’s margins declined from around 3 per cent in the year ago period because of higher cost of funds. Shares of the bank closed at ₹108.05, up 4.14 per cent on the BSE.

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