Union Bank of India on July 20 reported a more than 107 percent on-year rise in its standalone net profit to Rs 3,236.44 crore in the first quarter of the current financial year.
This is on the back of improvement in the asset quality, lower provisions and increase in net interest income.
In the similar period last year, the state-owned lender reported Rs 1,558.46 crore profit.
On a sequential basis, net profit rose 16.32 percent, Union Bank of India said in an exchange filing.
In the reporting quarter, the net interest income of the lender increased 16.59 percent on-year to Rs 8,840 crore. Similarly, on the sequential basis, it rose 7.14 percent.
While, the non-interest income of the bank rose 38.57 percent on-year in April-June quarter to Rs 3,903 crore. However, it fell sharply over 25 percent on-quarter.
The net interest margins of the bank increased to 3.13 percent in June quarter, which is up 13 basis points (Bps) on-year, and 15 bps on-quarter.
In the similar quarter last year, the state-owned lender reported net interest margins of 3.00 percent. One basis point is one hundredth of percentage point.
Net interest margins is a measure of difference between interest earned by the lender and interest it pays out to its lenders.
Asset quality
In April-June quarter, Union Bank of India reported an improvement in the asset quality, with gross non-performing asset (NPA) ratio improved by 288 bps and net NPA decreased by 173 bps compared to year ago period.
According to the press release, gross NPA of the bank fell to 7.34 percent as on June 30, as compared to 7.53 percent in the previous quarter, and 10.22 percent in a year ago period.
Similarly, net NPA of the bank decreased to 1.58 percent in April-June quarter, as against 1.70 percent quarter ago.
In absolute terms, gross NPA stood at Rs 60,104 crore, down 19.32 percent on-year, and net NPA stood at Rs 12,138 crore, down 45.79 percent, as per press release.
Provision coverage ratio of the bank also increased by 611 bps to 90.86 percent in the reporting quarter.
The total provisions of the bank in first quarter of the current financial year rose marginally by 1.38 percent on-year to Rs 3,943 crore.
Advances & Deposit
The global and domestic advances of the state-owned lender increased 12.33 percent and 11.77 percent on-year, respectively in June quarter.
According to the press release, global advances stood at Rs 8.19 lakh crore and domestic advances stood at 7.94 lakh crore in April-June.
Deposits rose 13.63 percent 0n-year to Rs 11.28 lakh crore.
However, retail term deposit less than Rs 2 crore fell 0.58 percent on-year to Rs 4.36 lakh crore. On sequential basis, it fell 0.43 percent.
Financial inclusion schemes
During the quarter ending June 30, Union Bank of India done new enrollment of 4.63 lakhs Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).
Similarly, accounts opened by banks under Pradhan Mantri Jan Dhan Yojana (PMJDY) increased 14.06 percent on-year to 2.84 Crores accounts under the Scheme with balance of Rs. 9,002 crore during the quarter ending June 30.
In the corresponding quarter last year, the figure was 2.49 crores account with balance of Rs 7,827 crore.
Under Union Nari Shakti Scheme for Women Entrepreneurs, the bank sanctioned 6,538 applications for Rs 617 crore during Q1 FY24.
In the reporting quarter, the bank sanctioned Rs 10,939 crore towards renewable energy sector and Rs 260 crore towards Union Green Mills.
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