Union bank

Union Bank of India consolidated net profit jumps 183% to Rs 1,510 cr in September quarter

Bank shares gained 6% on Tuesday to close at Rs 49.45 a piece on BSE

State-owned Union Bank of India on Tuesday announced a 183% increase in its consolidated net profit to 1,510 crore rupees for the September 2021 quarter, mainly due to the takeover of the DHFL account which was written off earlier. . The lender’s net profit stood at Rs 533.87 crore in the corresponding quarter of last year, according to an ESB filing.

The bank’s core net interest income increased 8.52% to Rs 6,829 crore, with lending growth of around 3% and net interest margin increasing to 2.95 % against 2.78% a year ago.

Non-interest income between July and September 2021 increased 65.32% to Rs 3,978 crore, mainly due to a reversal of Rs 1,764 crore in written off accounts.

Speaking to reporters, its managing director and managing director Rajkiran Rai G said the overall recoveries were Rs 5,341 crore, of which Rs 1,650 crore came from DHFL recovery alone, which contributed to the profit.

The bank is seeing healthy lending growth in the retail and agriculture sectors, but business growth is slow, he said, adding that it aims to end fiscal 22 with a loan growth of up to eight percent. Its gross ratio of non-performing assets stood at 12.64% at the end of September 2021, compared to 14.71% a year ago.

The new slips stood at Rs 6,745 crore, of which around Rs 2,600 crore was from entities linked to the Srei group, Rai said adding he had taken a 65% provision on the struggling NBFC exposure. .

The overall provisions had fallen to Rs 3,273 crore from Rs 4,242 crore. Rai said there was a recovery in DHFL case, but the money set aside for Srei’s pension increase was almost the same as the benefit. For the second half of the year, the bank aims to contain slippages between Rs 4,000 and 5,000 crore, Rai said. He added that the restructured assets of 3% can also be supported with future operating profits.

After making recoveries of Rs 10,000 crore in the first half, the bank also increased its overall recovery target for the fiscal year 22 to Rs 16,000 crore from the previous Rs 13,000 crore, Rai said. The overall capital adequacy stood at 13.64% as of September 30, of which 10.16% in base capital.

On a stand-alone basis, the bank’s net profit nearly tripled to reach Rs 1,526.12 crore in the September 2021 quarter, compared to a net profit of Rs 516.62 crore in the corresponding quarter of last year. The bank’s shares gained 6% on Tuesday to close at 49.45 rupees each on BSE.

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