Union Bank of India Q3 net profit plunges on higher bad loans

MUMBAI (Reuters) - Union Bank of India reported a 74 percent drop in its quarterly net profit due to sharply higher bad loans and provisions as lenders comply with a regulatory order to treat some troubled loans as bad in a clean-up drive.

Net profit fell to 785.4 million rupees ($11.6 million) on a standalone basis for the fiscal third quarter to Dec. 31 from 3.02 billion rupees a year earlier, the Mumbai-based bank said in a regulatory filing on Thursday.

Analysts on average had expected a net profit of 4.82 billion rupees, according to data compiled by Thomson Reuters.

Gross bad loans as a percentage of total loans increased to 7.05 percent in the December quarter from 6.12 percent in the September quarter. Provisions, including for loan losses, nearly tripled sequentially to 12.38 billion rupees.

The Reserve Bank of India has asked lenders to treat some troubled accounts as if they were bad loans and make adequate provisions, as part of its efforts to clean up bank balance sheets by March 2017.

Oriental Bank of Commerce, another state-run lender, on Thursday reported a quarterly loss as bad loans surged.

Top lender State Bank of India and third-biggest state-run lender Bank of India will report third-quarter results later on Thursday.

($1 = 68.0100 Indian rupees)

(Reporting by Devidutta Tripathy; Editing by Anupama Dwivedi)