Robust growth in non-interest income and reversal in tax provisions helped Union Bank of India report a 12.5 per cent year-on-year increase in net profit in the reporting quarter ended March 31, 2017.

The public sector bank reported a net profit of ₹108 crore in the fourth quarter as against ₹96 crore in the year-ago quarter.

For the full year however, net profit was down 59 per cent to ₹555 crore (₹1,352 crore in FY16).

In Q4, net interest income (the difference between interest earned and interest expended) was up 14 per cent at ₹2,387 crore (₹2,085 crore in the year-ago period).

Non-interest income, comprising fees and commissions, foreign exchange and derivatives revenue, gain on revaluation/sale of investments, miscellaneous income,jumped 45 per cent to ₹1,446 crore (₹996 crore).

Provision for non-performing assets (NPAs) was lower at ₹1,505 crore (₹2,008 crore). There was a reversal in provision for taxes (arising from recognition of deferred tax assets) to the tune of ₹418 crore.

As on March-end 2017, deposits were up 10 per cent y-o-y at ₹3,78,392 crore. The share of low-cost current account, savings account (CASA) deposits in overall deposits improved to 34.4 per cent from 32.3 per cent.

Advances rose 7 per cent to ₹2,86,467 crore mainly on the back of growth in loans to the retail, agriculture and micro, small and medium segments.

Asset quality pressure eases

Pressure on the asset quality front seems to be gradually easing with incremental NPA addition in the reporting quarter relatively lower at ₹2,951 crore (with 68 per cent of it coming from the medium and large sectors) as against ₹6,170 crore in the year-ago quarter.

Gross NPA as a percentage of gross advances increased to 11.17 per cent as on March-end 2017 as against 8.70 per cent as at March-end 2016. However, sequentially GNPA was lower from 11.70 per cent in the December 2016 quarter.

Union Bank of India shares closed at ₹188 apiece, up 0.56 per cent over the previous close on the BSE.

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