Union Bank profit rises marginally to Rs 789 cr

Beena Parmar Updated - March 12, 2018 at 04:04 PM.

Net profit for the full year increased 21 per cent to Rs 2,158 crore against Rs 1,787 crore in FY’12.

Hurt by lower margins and higher provisions, Union Bank of India posted a marginal increase in net profit at Rs 789 crore in the January to March quarter.

Provisions during the quarter rose 27 per cent to Rs 656 crore as against Rs 517 crore in Q4FY12.

Net interest margin declined to 2.89 per cent. “Higher cost of deposits and reduction in base rate kept margins under pressure,” said D. Sarkar, Chairman and Managing Director of the bank.

Full year results

Net profit for the full year increased 21 per cent to Rs 2,158 crore compared with Rs 1,787 crore in FY12.

As on March 2013, year-on year total advances grew 17 per cent on the back of retail, micro, small and medium enterprises growth. Deposits were up 18 per cent.

“The deposit growth in FY14 will be around 14-15 per cent, while advances growth is expected to be at about 15-17 per cent,” Sarkar said.

Capital adequacy ratio of the bank under Basel II norms was lower at 11.45 per cent, as compared to 11.85 per cent as on March end, 2012.

Gross non-performing assets (NPA) ratio as on March 31, 2013, declined to 2.98 per cent as compared with 3.01 per cent as on March end last year.

NPAs

Slippages during the quarter jumped 44 per cent to Rs 875 crore (as against 607 crore in the year-ago quarter) due to slower growth in the power, infrastructure and steel sector.

Restructured assets during the quarter stood at Rs 1,400 crore. The bank expects Rs 2,200 crore worth restructured assets in Q1FY14.

According to Sarkar, the lower cost of deposits and lower NPAs would be a challenge in FY14.

The board recommended a dividend of Rs 8 per share for the fiscal year 2012-13.

The scrip of Union Bank ended 1.42 per cent higher at Rs 242.60 per share on the Bombay Stock Exchange on Thursday.

beena.parmar@thehindu.co.in

Published on May 9, 2013 08:44