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Lower provisions and contingencies coupled with moderate growth in net interest income helped Union Bank of India post a 37 per cent jump in net profit at Rs 303 crore in the October-December 2012 quarter. Net profit in the year-ago period was Rs 197 crore.
Net interest income (the difference between interest earned and expended) was up 10 per cent at Rs 1,891 crore (Rs 1,721 crore in the year-ago period). Non-interest income declined marginally to Rs 640 crore (Rs 652 crore).
Provisions (other than taxes) and contingencies were lower at Rs 857 crore (Rs 973 crore).
According to Chairman and Managing Director D. Sarkar, credit growth in the micro, small and medium enterprise, retail and agriculture segments. Corporate loan growth, however, continues to be sluggish.
The public sector lender will be focussing on recovery of bad loans. The strategy will be to ensure that recovery should be higher than slippages, said Sarkar.
Bad loans, in gross terms, rose 22.55 per cent to Rs 6384 crore as at December-end 2012 (Rs 5,209 crore as at December-end 2011).
Base rate cut
The bank has cut its base rate from 10.50 per cent to 10.25 per cent, making all floating rate loans cheaper.
Shares of Union Bank of India closed at Rs 255.10 per share, up 5.81 per cent on the BSE on Thursday.
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