 "UBI net up 29 percent on non-interest income")
Mumbai: Despite a three-fold rise in the provisions, state-run Union Bank of India (UBI) today posted a 29.26 percent jump in net profit for the fourth quarter ended 31 March at Rs 773 crore, driven by a healthy rise in non-interest income.
Total provisions more than tripled to Rs 826 crore from Rs 272 crore in the same period a year ago on higher allocations for taxation and restructured assets.[caption id=“attachment_304308” align=“alignleft” width=“380” caption=“Logo of Union Bank of India. Image courtesy UBI”]  [/caption]
The government lender’s gross non-performing assets rose to Rs 5,450 crore, or 3.01 percent of the total advances, up from 2.37 percent in the year-ago period.
The net interest margin (NIM) also came down to 3.26 percent from 3.44 percent a year ago.
The non-interest income grew 25.62 per cent to Rs 755 crore, helped by recoveries from written-off accounts and jump in the core non-interest income.
Recoveries from written off accounts were 65.31 percent higher at Rs 162 crore, while the core non-interest income grew 21 percent to Rs 403 crore.
Even though it has notched up a healthy 18 percent rise in credit during FY12, the bank’s net interest income grew by only 9.32 percent during the year to Rs 1,877 crore.
Investors battered the bank scrip, which tanked 4.04 percent to close at Rs 202.90 on the BSE, whose 30-share Sensex shed 0.40 per cent today.
The lender added Rs 3,000 crore to its restructured book during the March quarter, mostly from the state-run discoms, telecom infrastructure and steel space, taking the total restructured book to Rs 11,879 crore.
UBI’s new chairman and managing director D Sarkar, however, said this was due to the larger problems faced by the economy but refrained from giving a guidance as to whether the trend of higher restructuring will continue or not.
Sarkar said the bank aims to maintain the NIM at above 3 percent for the current fiscal and will be looking to grow credit and deposits at 19 and 17 percent, respectively.
The low-cost current and saving account deposits constituted for 31.28 percent of the deposits as on 31 March.
The bank will focus on the retail, small and medium enterprises and agricultural segments to grow during the fiscal, he said.
Its total capital adequacy stood at 11.85 percent as on 31 March 2012 and Sarkar said the bank will not require any fresh support for the next two years.
PTI
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