Union Bank of India (UBI) reported a 14 per cent year-on-year/yoy increase in the first quarter net profit at ₹3,679 crore, helped by moderate growth in net interest income and non-interest income, decline in NPA provisions and tax expenses, and write-back in provisions for non-performing investments.
The Mumbai-headquartered public sector bank had reported a net profit of ₹3,236 crore in the year ago quarter
Net interest income (difference between interest earned and interest expended) was up about 6 per cent y-o-y at ₹9,412 crore (₹8,840 crore in the year-ago quarter).
Non-interest income, comprising income (including commission) from non-fund based banking activities, fees, earning from foreign exchange, profit/loss on sale of assets, profit/loss (including revaluation) from investments, recovery from accounts written off, etc, rose about 16 per cent to ₹4,509 crore (₹3,903 crore).
Net interest margin declined to 3.05 per cent in the reporting quarter from 3.13 per cent in the year ago quarter.
While provisions for non-performing assets (NPAs) declined about 17 per cent y-o-y to ₹1,651 crore (₹1,984 crore), provisions for standard assets spared to ₹1,296 crore (₹56 crore).
The Bank received a higher write-back in provision on non-performing investments of ₹300 crore (₹107 crore). Tax expenses declined to ₹1,351 crore (₹1,938 crore).
The gross non-performing assets (NPA) to gross advances position improved to 4.54 per cent as at June-end 2024, against 4.76 per cent as at March-end 2024.
The net NPA to net advances position improved to 0.90 per cent against 1.03 per cent.
Total deposits increased by 8.52 per cent yoy to stand at ₹12,24,191 crore as on June-end 2024. Within this, domestic deposits were up 7.48 per cent at ₹11,96,168 crore.
Low cost current account, savings account (CASA) deposits declined to 33.40 per cent of domestic deposits as at June-end 2024 against 34.60 per cent as at June-end 2023.
Gross Advances rose by 11.46 per cent yoy to stand at ₹9,12,214 crore. Within this, domestic and overseas advances rose 10.76 per cent (to ₹8,78,797 crore) and 33.62 per cent (to ₹33,417 crore), respectively.
The Bank has projected advances and deposits to grow 11 – 13 per cent and 9 - 11 per cent, respectively in FY25. It expects NIM to be in the 2.8 - 3.0 per cent range.
UBI expects GNPAs to go down below 4 per cent. It is eyeing recoveries of ₹16,000 crore and cap slippages at ₹11,500 crore in FY25.