“The sharp increase in profit was due to Rs. 140 crore received by the public sector bank as write back of income tax,” said Arun Tiwari, Chairman and Managing Director, Union Bank of India.
Net interest income (different between interest income and expended) increased by a moderate 7 per cent to Rs. 2,085 crore as against Rs. 1,954 crore in the same quarter last year. However, non-interest income for the second quarter rose 33 per cent to Rs. 812 crore from Rs. 611 a year ago.
During the quarter provisions declined 16 per cent to Rs. 785 crore from Rs. 937 crore in the second quarter FY14.
As on September 30, 2014, domestic advances grew 9 per cent to Rs. 226,011 crore, while domestic deposits rose 4 per cent.
“Our growth came from retail, agriculture and MSME, while corporate growth was flat as business growth remains subdued,” Tiwari said.
He added that the credit and deposit growth is likely to be at 11-12 per cent and 9-10 per cent for FY15, while (gross) NPAs will be contained at 4 per cent.
Gross non-performing assets (NPAs) worsened to 4.69 per cent as on September 30, 2014 as against 3.64 per cent as on September 30, 2013. Net NPAs also increased to 2.71 per cent from 2.15 per cent.
Though the bank made recovery of assets worth Rs. 516 crore, the slippages into bad loans were at Rs. 1,968 crore.
Net interest margins dropped to 2.56 per cent from 2.58 per cent in September quarter last year due to proportionately higher cost of funds. “We target NIM of 2.8-2.9 per cent for the full year,” Tiwari said.
The shares of Union Bank of India ended at Rs. 225.50, 0.58 per cent higher over its previous close on BSE.
Source : The Hindu