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UBI Q1 profit surges 73% on lower provisions

Most of the accounts with NCLT are in its final stages of recovery.

ET Bureau|
Last Updated: Aug 02, 2019, 08.46 PM IST|Original: Aug 02, 2019, 08.46 PM IST
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Mumbai: Union Bank of India’s net profit saw a 73% increase in June quarter on the back of lower provisions.

Its net profit rose to Rs 225 crores in the June quarter from Rs 130 crore a year ago. The Bloomberg poll of analysts estimated a loss of Rs 183 crores.

“Most of the accounts with NCLT are in its final stages of recovery, we hope to bring the gross NPA and net NPA percentages below 12% and 6% respectively,” said Rajkiran Raj G, MD CEO, Union Bank of India.

The bank said it has signed 23 Inter-creditor Agreement (ICA) so far, and it saw a dip in its Net Interest Income (NII), at Rs 2519 crore in the quarter under review against Rs 2626 crore during the corresponding period last year. The NIMS stood at 2.17% this quarter versus 2.34% the previous year Q1.

Provisions for bad loans fell to Rs 1431 crore versus Rs 1803 crore last year. The provision coverage ratio (PCR) of the bank stood at a robust 65.88% this quarter. The asset quality of the bank improved with absolute gross non-performing loans falling to Rs 48812 crore in the June quarter versus Rs 50973 crore during the same period last year. The GNPA ratio fell to 15.18% from 16% YoY and the net NPA ratio registered a fall at 7.23% from 8.70% YoY.

State-lender reported a maximum slippage amount of Rs 977 crores from Micro and Small Sector (MSE) and the minimum slippage amount from retail loans sector of Rs 292 crores.

The stock of Union Bank was trading on BSE at 64.70 which is a fall of 1.30% while Sensex gained 0.27% to close at 37,118.22.
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