Union Bank of India (UBI) reported a 93 per cent year-on-year (yoy) jump in fourth quarter (Q4FY23) net profit at ₹2,782 crore on the back of healthy growth in net interest income and robust recovery from written-off accounts.
The public sector bank had reported a net profit of ₹1,440 crore in the year-ago quarter. Net profit in the reporting quarter is 24 per cent up over third quarter’s ₹2,245 crore.
The bank’s Board has recommended a dividend of ₹3 per equity share of ₹10 each for FY23.
NIM jumps 22 pc
Net interest income (difference between interest earned and interest expended) rose 22 per cent yoy to₹8,251 crore (₹6,769 crore in the year ago quarter).
Non-interest income (comprising fee-based income, treasury income, and recovery in written-off/WO accounts) soared 62 per cent yoy to ₹5,269 crore ( ₹3,243 crore). Within this, recovery in WO accounts increased 10 times to ₹2,954 crore (₹294 crore).
Provision for non-performing assets (NPAs) increased 13 per cent yoy to ₹3,567 crore ( ₹3,154 crore).
Net interest margin improved to 2.98 per cent in Q4FY23 against 2.75 per cent in Q4FY22.
GNPAs position improved to 7.53 per cent of gross advances as at March-end 2023 against 7.93 per cent as at December-end 2022. Net NPAs position too improved to 1.7 per cent of net advances against 2.14 per cent.
Gross advances were up 13 per cent yoy and stood at ₹8,09,905 crore as at Mach-end 2022. Total deposits increased by 8 per cent and stood at ₹11,17,716 crore.
A Manimekhalai, MD & CEO, said the Bank is eyeing 8-10 per cent growth in deposits and 10-12 per cent growth in advances in FY24.
She observed that the bank has a corporate loan sanctions pipeline of ₹35,000 crore. This comprises sanctions to companies in sectors such as road projects, iron & steel, renewable energy and chemicals.
Manimekhalai said the special mention accounts (SMAs; these are accounts showing signs of incipient stress) position in the case of retail loans is a little dicey. However, these loans are backed by proper security, she added.
To raise funds
The bank is planning to raise ₹10,100 crore in FY24 via equity (₹8,000 crore), additional tier-1 bonds (₹1,000 crore) and tier-2 bonds (₹1,100 crore).
The fund raising via equity will serve two purposes -- garner capital to grow business and comply with the SEBI regulations that require a publicly listed company to have a minimum of 25 per cent public shareholding.
Public shareholding norm
Manimekhalai said the bank has time up to August 2024 to comply with the minimum public shareholding norm. As at March end 2023, shareholding of the government and public in the bank was at 83.49 per cent and 6.57 per cent, respectively.