Union Bank Q3 net rises 43%

Union Bank of India posted a robust 42.58 per cent rise in net profit for the third quarter ended December 31, 2007, at Rs 365 crore as against Rs 256 crore in the corresponding quarter last financial year.

Interest income, recoveries and gains from trading in securities contributed to rise in profits in the reporting quarter.

Total income increased to Rs 2,806 crore from Rs 2,015 crore. During the quarter, net interest income (NII) rose 15.66 per cent to Rs 789 crore from Rs 686 crore. "The focus on segments like small and medium enterprises, retail and trading, which give better yields, boosted the NII," Chairman and Managing Director M V Nair said.

The net interest margin (NIM)for the quarter, however, dipped to 2.83 per cent from 2.99 per cent a year ago.

Deposits rose 28.38 per cent to Rs 99,227 crore. The cost of funds rose by 100 basis points to 5.99 per cent. 
 

Rs crore	2006	2007
Interest earned	1,849.20	2,458.59
Other income	205.24	347.45
Expenditure	1,549.35	2,170.19
PBT	505.09	635.85
Net profit	255.84	365.02
CAR (%)	13.21	13.03
NP(%)	13.84	14.85
Source: BSE

Meanwhile, advances grew to Rs 74,251 crore. The yield on advances also increased by 100 basis points to 10.33 per cent.

The Mumbai-based public sector bank also revalued its assets during the quarter. This added about Rs 600 crore to its tier II capital.

"The bank will raise capital up to Rs 1,000 crore through perpetual bonds (Rs 200 crore) and Rs 800 crore via tier II bonds," Nair added. The capital adequacy ratio was 13.03 per cent. After conforming to Basel II norms, the ratio is expected to be around 12 per cent.