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| Union Bank Q4 net down 10.56 per cent |
| BS Reporter / Mumbai May 08, 2009, 00:12 IST |
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 Union Bank of India’s net profit for the fourth quarter ended March 2009 declined by 10.56 per cent to Rs 466 crore from Rs 521 crore in January-March, 2008 owing to higher provisioning.
The total income for the reporting quarter rose to Rs 3,848 crore from Rs 2,913 crore in the same period of 2007-08. Net interest income (NII) of the bank in the fourth quarter rose by 19.95 per cent to Rs 926 crore, against Rs 772 crore a year ago.
The NII showed a subdued growth owing to rise in funding costs and cut in bench mark lending rates that affected the income growth, Union Bank’s Chairman and Managing Director MV Nair said. The net interest margin for the quarter stood at 2.8 per cent.
The net profit for Q4 was down owing to substantially higher provision of Rs 446 crore against Rs 370 crore in the same period last year, he added. Its tax provisions moved up from Rs 4.37 crore to Rs 163 crore.
While the bank made a provision of Rs 87 crore for employee benefits in January-March, 2009, it had write back of Rs 142 crore in Q4 of 2007-08 on this count. Without these extra-ordinary items, net profits would have shown 45.64 per cent rise, Nair said.
The net profit for the year ended March 2009 rose by 24.51 per cent to Rs 1,727 crore from Rs 1,387 crore in 2007-08. Total income of the bank rose to Rs 13,371.93 crore for FY09 from Rs 10.534.27 crore in FY08. The NII rose to Rs 3,813 crore from Rs 2,853 crore.
The total deposits rose by 33.35 per cent to Rs 1,38,703 crore from Rs 1,03,859 crore a year ago. The share of low-cost deposits — current accounts and savings accounts (CASA) — stood at 30 per cent.
The bank has projected 23 per cent growth in total deposits and is eyeing an improvement in the share of CASA to 32 per cent by end of 2009-10.
The total advances were up by 29.5 per cent to Rs 98,265 crore. It has projected a 25 per cent growth in advances for 2009-10.
Its gross non-performing assets (NPA) rose in absolute terms to Rs 1,923.34 crore from Rs 1,656.6 crore while in percentage terms, they declined to 1.96 per cent from 2.18 per cent.
The net NPA also went up to 325.94 crore (0.34 per cent) from Rs 107.77 crore (0.15 per cent). NPA coverage ratio declined to 83.05 per cent from 93.49 per cent a year ago.
Capital adequacy stood at 13.27 per cent at the end of March 2009. The bank plans to raise capital through tier-I instruments in the first quarter ended June 2009.
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