Comments
Mumbai, May 13
Union Bank of India (UBI) reported an 8 per cent year-on-year (yoy) increase in fourth quarter standalone net profit at ₹1,440 crore due to healthy growth in net interest income (NII), a decline in bad loan provisions, and the disinvestment of a major portion of its stake in lndiaFirst Life lnsurance.
The public sector bank had reported a net profit of Rs 1,330 crore in the year ago quarter
UBI’s net profit was up 80 per cent y-o-y to ₹5,232 crore ( ₹2,906 crore in FY21).
The Bank’s Board has declared a dividend of ₹1.90 per equity share of ₹10 each for FY2022.
Rajkumar Rai G, MD and CEO, said: “Our profits are steady....We are continuing to make higher provisions on accounts, more than the regulatory requirement.”
He observed that the sale of 21 per cent stake in IndiaFirst Life Insurance is one of the reasons for the increase in bottomline.
Rai emphasised that since the Bank has higher profits, it is trying to strengthen its balance sheet by making higher provisions so that in the future quarters there is no provisioning pressure.
NII growth
In the reporting quarter, NII (difference between interest earned and interest expended) was up 25 per cent y-o-y at ₹6,769 crore (₹5,403 crore in the year ago quarter).
Non-interest income, comprising fee based income, trading income, recovery in written-off accounts, and others, declined about 25 per cent yoy to ₹3,243 crore (₹4,330 crore).
Provisions towards non-performing assets (NPAs) declined about 27 percent y-o-y to ₹3,460 crore (₹4,712 crore). The write-back of provisions towards taxation (₹99 crore) and the funded interest term loan (₹26 crore) also supported the bottomline.
Gross NPAs declined to 11.11 per cent of gross advances as at March-end 2022 against 13.74 per cent as at March-end 2021. Net NPAs declined to 3.68 per cent (4.62 per cent).
Total Deposits increased by 11.75 per cent y-o-y to stand at ₹10,32,393 crore as at March-end 2022. Gross advances were up 9.60 per cent yoy to stand at ₹7,16,408 crore
Union Bank’s guidance for advances and deposit growth is 10-12 per cent and about 10 per cent, respectively, in FY23, Rai said.. By March 2023, its GNPAs should come down to around 9 per cent.
The global net interest margin (NIM) target for FY23 is about 3 per cent. The Bank’s global NIM was higher at 2.94 per cent in FY22 FY22 against 2.71 per cent in FY21.
.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.