Union Bank of India (UBI) reported a 49 per cent year-on-year (y-o-y) increase in standalone net profit at ₹1,085 crore against ₹727 crore on the back of rise in net interest income (NII) and decline in total provisions. The public sector bank’s NII was up about 9 per cent y-o-y to ₹7,174 crore (₹6,589.50 crore).
Other income, comprising recoveries made in written-off accounts, fee income on non-fund based banking activities, earnings from foreign exchange transactions, profit and loss on revaluation of investments, profit and loss on sale of investments and dividends from subsidiaries, etc., shrank 15 per cent y-o-y to ₹2,524 crore (₹2,970 crore).
Global net interest margin rose to 3 per cent in the reporting quarter against 2.94 per cent in the year ago quarter. Total provisions declined 12 per cent y-o-y to ₹4,013 crore (₹4,538 crore). Within total provisions, loan loss provisions fell 25 per cent to ₹2,274 crore (₹3,036 crore).
Fresh slippages, during the reporting quarter, were lower at ₹3,411 crore against ₹6,745 crore in the preceding quarter. About 35 per cent of the fresh slippages came from the large corporate and other segment, followed by MSME (26 per cent) and agriculture (25 per cent), and retail (14 per cent).
Gross non-performing asset
Reduction in gross non-performing assets (GNPAs) via recoveries, upgradation and write-off, during the reporting quarter were lower at ₹5,836 crore (₹14,296 crore in the preceding quarter). GNPA position improved to 11.62 per cent of gross advances as at December-end 2021 against 12.64 per cent in the preceding quarter.
Net NPAs position, too, improved to 4.09 per cent of net advances against 4.61 per cent in the preceding quarter. Total deposits and total advances were up 6 per cent each to ₹9,37,455 crore and ₹6,16,813 crore, respectively.
Share of the low-cost current account, savings account deposits increased to 36.99 per cent from 35.38 per cent in the year ago quarter. Within advances, the growth mainly came on the back of retail advances (up 9.78 per cent y-o-y), agriculture (11.08 per cent), and MSME (6.38 per cent).