Union Bank of India net profit falls 37% to Rs 727 crore in Dec quarter

Union Bank of India’s net profit fell 37.27 per cent to Rs 727 crore in the third quarter ended Dece­mber 2020 on a drop in non-interest income.
 
It had booked net profit of Rs 1,159 crore in Q3FY20. The amalgamation of Andhra Ba­nk and Corporation Bank into Union Bank of India came into effect on April 1, 2020, and the combined financials (Ma­rch 2020 and December 2019) were arrived at by aggregating the audited/ rev­iewed num­bers of the three banks. Its stock closed 5.25 per cent hig­her at Rs 31.05 per share on the BSE.
 
Net interest income for the reporting quarter rose 4.85 per cent to Rs 6,590 crore, from Rs 6,285 in Q3FY20. Net interest margin came under pressure and moderated to 2.94 per cent in Q3FY21, from 3.15 per cent in the year-ago quarter.

 

Non-interest income decl­ined 17.75 per cent to Rs 3,016 crore in Q3FY21, from Rs 3,667 crore in Q3FY20. Banks dep­osits grew 2.58 per cent, from Rs 8,60,196 crore in Decem­ber 2019 and Rs 8,8­2,423 crore in Dece­mber 2020. Its total advances exp­anded 0.69 per cent, from Rs 6.47 trillion in December 2019 to Rs 6.52 trillion in December 2020. Following an interim stay by the Supreme Court (SC), the bank has not classified any borrower account as a non-performing asset (NPA). 
 
Pending the SC’s final order, its proforma gross NPAs were at 15.29 per cent. Its net NPAs were at 5.02 per cent at the end of December 2020. It has guided for gross NPAs below 15 per cent and net NPAs below 5 per cent at the end of March 2021.