Union Bank Q1 net more than doubles to Rs 3,236 cr; NPA provisions decline

Union Bank of India’s net profit more than doubled year-on-year (YoY) to Rs 3,236 crore in the quarter ended June 30, 2023 (Q1FY24) over rise in net interest income (NII), non-interest income, and a fall in provisions for bad loans.

Sequentially, the public sector lender’s profit went up 16 per cent from Rs 2,782 crore in Q4 FY23. Its stock closed 2.3 per cent higher at Rs 86.95 a share on the BSE.

The lender’s NII expanded 16.6 per cent to Rs 8,840 crore in Q1 FY24 compared to Rs 7,582 crore in the same quarter a year ago. Sequentially, NII rose 7.14 per cent from Rs 8,251 crore in Q4 FY23.

Net interest margin (NIM) expanded 13 basis points (bps) to 3.13 per cent in Q1 of FY24 compared to 3 per cent in Q1 FY23. Sequentially, NIM was up from 2.98 per cent in Q4 FY23, the bank said in a press statement.

Non-interest income rose 38.57 per cent YoY to Rs 3,903 crore. Sequentially, it fell by 25.92 per cent from Rs 5,269 crore in Q4 FY23.

The lender’s provisions for non-performing assets (NPAs) declined from Rs 3,652 crore in Q1 of FY23 to Rs 1,984 crore in Q1 FY24. Advances grew 12.33 per cent YoY to Rs 8.18 trillion in Q1 FY24. Total deposits increased 13.63 per cent YoY to Rs 11.28 trillion.

The share of low-cost deposits — current account and saving account (CASA) — declined to 34.6 per cent at the end of June 2023 from 36.2 per cent a year ago. The asset quality profile improved with gross NPAs declining to 7.34 per cent in June 2023 from 10.22 per cent in June 2022.

Net NPAs also declined to 1.58 per cent in June 2023 from 3.31 per cent a year ago.

The provision coverage ratio (PCR) improved to 90.86 per cent in June 2023 from 84.75 per cent a year ago. Capital adequacy stood at 15.95 per cent with Tier-1 at 13.86 per cent at the end of June 2023.