Union Bank of India Q4 net profit down 27%

The bank's net profit for Q4 of 2013-14 was Rs 789.38 crore

Public sector lender Union Bank of India has posted a 26.65 per cent drop in net profit to Rs 578.96 crore in the quarter ended March on sharp rise in provisions for stressed assets and fall in non-interest income.

Its net profit for Q4 of 2013-14 stood at Rs 789.38 crore.

For the full financial year, net profit declined 21.4 per cent to Rs 1,696 crore against Rs 2,158 crore in the previous financial year.

The lender’s provision for the quarter on stressed assets rose to Rs 920 crore against Rs 655 crore in corresponding quarter of FY13.

The net-interest income for the quarter rose just 3.6 per cent to Rs 2,052 crore  against Rs 1, 980 crore. The net interest margin (NIM) for the March quarter stood at 2.55 per cent, against 2.89 per cent in the year-ago period.

The non interest income for the quarter fell to Rs 775 crore from Rs 875 crore the year-ago period.

Its advances grew 10.6 per cent to Rs 2,34,332 crore at the end of March 2014.

Arun Tiwari, chairman and managing director, said the bank had contained growth in risk-weighted assets. It also pruned its portfolio of corporate loans which were given at base rate.

The focus has been on growing retail, agriculture and SME loan book. This approach will guide bank business in 2024-15 also. Bank has pegged credit growth of 10-12 per cent in FY15.

Its deposit grew 12.9 per cent to Rs 2, 97, 675 crore. The share of low cost desposits improved to 30 per cent at end of FY14 from 29 per cent a year ago.

Its gross non per performing assets stood at 4.08 per cent in March 2014, up from 2.98 per cent year ago. Bank will work to bring down gross NPAs to 3.75 per cent by March 2015, Tiwari said. the bank restructured assets worth Rs 1, 435 crore in Q4. The outstanding restructured loan book was Rs 15, 000 crore. The restructuring in pipeline is about 1, 700 crore Dor Fy 15.

Its capital adequacy was 10.80 per cent with tier I of 7.54 per cent at end of March 2014.

It expects deposit to grow by 9-10 per cent.