Union Bank Q3 net down by 74.2%

Interest income takes hit, provisions up 45%

Public sector lender Union Bank of India posted 74.2% drop in net profit at Rs 78 crore for the third quarter ended December 2015 on fall in net interest income and rise in provisions for bad loans.

It had posted a net profit of Rs 302 crore in October-December 2014. 

The net interest income dipped by 5.8% to Rs 1, 997 crore from Rs 2, 120 crore

Its non interest income showed just 1.5% growth of Rs 892 crore. 

Bank's credit grew by 5.8% to Rs 2, 62, 477 crore. Its has slashed credit growth target for Fy16 to 8-9% from 10-11%. Deposits book expamded by 4.6% to Rs 3, 27, 412 crore.

Showing effect of Reserve Bank of India's directive fir accelerated recognition of bad loans, the gross non-performing assets rose to 7.05% (Rs 18, 485 crore)  in December 2015 from 5.08%  ( Rs 12, 596 crore) a year ago. 

Over 50% of slippages were on account of RBI's fiat, it chiarman and manging director Arun Tiwari said.

Its provisions and contingencies including those for stressed loans rose by 45.3% to Rs 1, 237 crore from Rs 851 crore. The provisions coverage ratio stood at 55% at end of December 2015.

The Capital Adequacy Ratio was 10.30% with tier I of 7.7%. Bank has permission to raise equity capital of over Rs 2, 000 crore.