Union Bank of India (UBI) reported a 60 per cent year-on-year (yoy) jump in third-quarter net profit at Rs 3,590 crore on the back of moderate growth in net interest income, robust growth in other income, and a sharp decline in provision towards bad loans and non-performing investments.
The bank reported a net profit of ₹2,245 crore in the year ago quarter.
Net interest income (difference between interest earned and interest expended) was up about 6 per cent YoY at ₹9,168 crore (₹8,628 crore in the year-ago quarter).
Non-interest income, including fee-based income, treasury income and recovery in written-off accounts, rose about 15 per cent YoY to ₹3,774 crore (₹3,271 crore).
Net interest margin (interest income - interest expense/ total assets) declined to 3.08 per cent from 3.21 per cent a year ago.
Gross non-performing assets (GNPAs) position substantially improved to 4.83 per cent of gross advances at December-end 2023 against 7.93 per cent at December-end 2022.
The bank saw a huge reduction in NPAs amounting to Rs 13,431 crore (including recovery in written-off accounts: ₹9,318 crore, cash recovery: ₹2,725 crore and upgradation: ₹1,388 crore) against ₹4,188 crore in the year-ago quarter.
Net NPAs position too improved to 1.08 per cent of net advances against 2.14 per cent.
Provision towards NPAs and non-performing investments declined sharply to ₹1,226 crore (₹2,443 crore in the year ago period) and ₹94 crore (₹861 crore), respectively. Provisions towards standard assets, however, rose to ₹414 crore (against a writeback of ₹290 crore).
Gross advances increased by 11.44 per cent yoy to ₹8,95,974 crore as at December-end 2023, with domestic and overseas advances growing by 10.69 per cent (to ₹8,66,689 crore) and 39.41 per cent (to ₹29,285 crore), respectively.
Within domestic advances, agriculture advances reported the highest growth of 17.88 per cent; followed by retail (12.60 per cent), MSME (10.51 per cent) and large corporate & others (8.68 per cent).
Total deposits were up by 10.09 per cent YoY at ₹11,72,455 crore as at December-end 2023. The share of current account, savings account deposits declined to 34.40 per cent of total deposits from 35.35 per cent.
UBI’s shares closed at ₹141.65 apiece on BSE, up 4.08 per cent over the previous close.