Union Bank of India booked a 77 per cent year-on-year increase in net profit for the second quarter of FY16 at ₹658 crore (₹371 crore in Q2 FY15).
The growth came on the back of advances to productive sectors of economy, such as retail, agriculture, and micro, small and medium enterprises (MSMEs).
The loan book to these sectors grew 10.2 per cent to ₹1,17,336 crore in Q2 FY16 (₹1,06,459 crore in Q2 FY15).
However, growth in domestic advances was near flat with the loan book growing 1.4 per cent to ₹2,29,226 crore (₹2,26,011 crore).
Domestic net interest margin (NIM) stood at 2.42 per cent in Q2 FY16, down 18 basis points y-o-y.
Non-interest income grew 18.2 per cent to ₹860 crore.
Bad loans as a percentage of total loans outstanding on gross basis (Gross NPA) were up to 6.12 in FY16 from 4.69 per cent in Q2 FY15.
After provisioning for these bad loans, net NPAs for Q2 FY16 stood at 3.39 per cent, up 68 basis points.
The bank’s current account, savings account (CASA) ratio stood at 28.6 per cent, down 10 bps year-on-year at ₹94,413 crore.
Capital adequacy ratio of the bank under Basel III norms was 10.26 per cent as on September 30, 2015.
During the quarter, the government increased its stake in the bank to 63.44 per cent from 60.47 per cent through a preferential allotment of over 5.56 crore shares at ₹209.05 apiece.
Over the year-ago period, the number of employees fell to 36,152 from 36,440.