Union Bank reports Q3 profit of Rs 575 crore, asset quality remains poor

State-owned Union Bank of India on Monday reported a net profit for Q3 FY20 at Rs 575 crore as compared to a loss of Rs 1,194 crore in Q2 FY20.

Net interest income for the Q3 FY20 increased by 25.7 per cent to Rs 3,134 crore as compared to Rs 2,493 crore in Q3 FY19. Domestic net interest margin improved to 2.55 per cent as compared to 2.23 per cent in the year-on period.

The lender said its global business grew by 8.5 per cent year-on-year to Rs 7.81 lakh crore as on December 31, 2019 while total global deposits grew by 10.6 per cent to Rs 4.45 lakh crore.

Global gross advances grew by 5.8 per cent to Rs 3.36 lakh crore driven by retail segment which increased at 10 per cent year-on-year as on December 31, 2019.

The CASA (current account savings account) base increased by 57 basis points quarter-on-quarter to 34.4 per cent at the end of Q3 FY20.

Operating profit for the April to December quarter increased by 12.7 per cent to Rs 6,528 crore as compared to Rs 5,791 crore in April to December 2018.

However, gross non-performing assets (GNPAs) ratio declined to 14.86 per cent as on December 31, 2019 compared to 15.24 per cent as on September 30, 2019.

Cash recoveries during Q3 FY20 increased by 261.4 per cent to Rs 2,255 crore as compared to Rs 624 crore in Q2 FY20.

Net NPA ratio remained stable at 6.99 per cent as on December 31, 2019 compared to 6.98 per cent as on September 30, 2019. Provision coverage ratio stood at 67.42 per cent at the end of Q3.

Tier-one and common equity tier (CET)-1 capital ratio stood at 12.69 per cent and 11.35 per cent respectively.

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