Mumbai: State-run Union Bank of India on Monday reported a profit of Rs 153.21 crore for the December quarter, as against a net loss of Rs 1,249 crore in the year-ago period, as the amount of money it has set aside for bad loans has halved.
This is the second consecutive quarter of profitability for the cit-based bank having booked a net profit of Rs 139 crore in the September quarter.
However, the core net interest income declined 2.2 percent to Rs 2,493 crore, while other income grew 25.4 percent to Rs 1,095 crore majorly on trading gains.
Domestic advances moved up 7.9 percent during the quarter and the bank management guided towards a 7-9 percent loan growth for the fiscal year to March 2019.
The overall net interest margin stood at 2.23 percent for the reporting period.
The bank has a Rs 1,100-crore exposure to the troubled infra lender IL&FS of which Rs 1,000 crore slipped into non-
performing asset during the reporting period, managing director and chief executive Rajkiran Rai said.
Gross non-performing assets increased to 15.66 percent from 13.03 percent in the year-ago period, but was down from
15.74 percent in the preceding quarter.
Overall provisions came in massively to Rs 1,617 crore as against Rs 3,254 crore in the year-ago period.
The bank sold over Rs 380 crore of bad loans to asset reconstruction companies during the quarter, he said, adding he is expecting up to Rs 4,000 crore in recoveries from the bad assets being resolved through NCLTs in the March quarter.
When asked about fate of the exposure to Essar Steel, which has been put on auction by SBI, Rai said the bank may soon take a call on what to do anytime.
The bank has 67 percent provisions on the 23 accounts which are in NCLTs, he said.
The bank counter tanked 6.39 percent at Rs 86.40 on the BSE, as against a 0.53 percent gain on the benchmark Sensex.
To keep watching India’s No. 1 English Business News Channel – CNBC-TV18, call your Cable or DTH Operator and ask for the Colors Family Pack (inclusive of 24 channels), available for Rs. 35/- per month, or subscribe to the channel for Rs. 4/- per day.
To keep watching the Leader in Global Market & Business News – CNBC-TV18 Prime HD, call your Cable or DTH Operator and ask for the Colors Family HD Pack (inclusive of 25 channels), available for Rs. 50/- per month, or subscribe to the channel for Rs. 1/- per day.
The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .
Updated Date: Jan 22, 2019 11:12:25 IST