Union Bank Q2 net up 78% at Rs 371 cr

Net interest income up 6.7% to Rs 2,085 cr, gross NPA at 4.69% of advances

State-run lender Union Bank of India on Friday reported 78.4 per cent increase in its net profit to Rs 371 crore for the July-September quarter, mainly due to tax refund of Rs 140 crore.

The tax expense for the bank during the period under review dropped to Rs 177 crore from Rs 800 crore recorded during the same period the previous year.

Net interest income growth was a mere 6.7 per cent to Rs 2,085 crore during the quarter on the back of single-digit loan growth. Non-interest income, however, grew by 32.9 per cent to Rs 812 crore.

The asset quality of the Mumbai-based lender worsened during the quarter following slippages of Rs 1,968 crore, which resulted in gross non-performing assets rising to 4.69 per cent as on end-September from 4.27 per cent in the preceding quarter. The ratio was 3.64 per cent during the second quarter of the previous year.

“Two large accounts slipped during the quarter, one from the cement industry and the other from textile, which was not anticipated. These two accounts contributed to 38 per cent of the total slippages,” said Arun Tiwari, chairman and managing director, Union Bank of India. He said the lender is aiming to bring down gross non-performing assets to 4 per cent by March.

While there has been large slippages but recovery and upgrade were healthy and stood at Rs 558 crore as compared to Rs 419 crore during the same period last year and Rs 318 crore during the first quarter.