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Union Bank of India (UBI) reported an 83 per cent quarter-on-quarter (QoQ) jump in standalone net profit at ₹ 1,330 crore in the fourth quarter ended March 31, 2021 against ₹727 crore in the third quarter ended December 31, 2020.
A write-back in standard assets provisions and other income supported the bottomline.
The bank’s financial results for Q4FY21 are for the post-amalgamation (Andhra Bank and Corporation Bank merged with the Bank with effect from April 1, 2020) period and that for the year ago period (Q4FY20) are of the pre-amalgamation period. Hence, the results are not comparable year-on-year.
In the year ago period, the bank had reported a net loss of ₹2,503 crore.
The net interest income (difference between interest earned and interest expended) was down 18 per cent QoQ to ₹5,403 crore (₹6,589 crore in Q3FY21).
Other income, including income from non-fund based activities, jumped 51 per cent QoQ to ₹4,551 crore (₹3,016 crore).
A break up of other income shows that, recovery in written-off accounts at ₹1,931 crore was about 8.3 times the recovery made in the preceding quarter and core fee based income rose 15 per cent QoQ to ₹1,522 crore.
While loan loss provisions were higher at ₹4,712 crore (₹3,036 crore in Q3FY21), there was a write-back in standard assets provision of ₹1,443 crore (against a provision of ₹2,227 crore).
Gross NPAs increased to 13.74 per cent of gross advances as at March-end 2021 against 13.49 per cent as at December-end 2020.
Net NPAs rose to 4.62 per cent of net advances as at March-end 2021 against 3.27 per cent as at December-end 2020.
MD & CEO Rajkiran Rai G said the bank’s asset quality is under control and net NPAs are expected to decline below 3 per cent in FY22.
The bank has projected a 8-10 per cent growth in advances in the current financial year.
Rai said the target for recovery from stressed assets in FY22 is about ₹13,000 crore against actual recovery of ₹10,173 crore made in FY21.
Of the 22 stressed assets aggregating about ₹89,000 crore that banks have identified for transferring to the proposed National Asset Reconstruction Company Ltd (NARCL), Union Bank has zeroed-in on 17-18 assets aggregating about ₹4,000 crore for transfer, he added.
Total deposits increased by 4.69 per cent QoQ to stand at ₹9,23,805 crore as at March-end 2021.Total advances nudged up 1.39 per cent QoQ to ₹5,90,983 crore.
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