Union Bank of India reported a 57 per cent jump in net profit for the second quarter ended September 30, 2012, at Rs 554 crore due to lower provisioning.
The public sector bank had posted a net profit of Rs 353 crore in the year-ago quarter. Provisioning during the quarter decreased by 22 per cent to Rs 487 crore from Rs 623 crore in the same quarter last year.
Net interest income (the difference between interest earned and expended) increased by 11 per cent to Rs 1,850 crore as against Rs 1,661 crore in Q2FY12. Non-interest income rose to Rs 546 crore, up 9 per cent from Rs 501 crore in Q2FY12.
Net interest margins declined to 3.02 per cent (from 3.21 per cent in Q2FY12). The gross non-performing assets (NPA) ratio increased to 3.66 per cent (from 3.49 per cent), while the net NPA ratio stood marginally higher at 2.06 per cent (2.04 per cent).
The capital adequacy ratio dropped to 11.39 per cent in line with Basel II norms (from 12.54 per cent in Q2FY12).
Post-results, the shares of Union Bank rallied more than 7 per cent to trade at 220.90 on the Bombay Stock Exchange.