Union Bank of India Q4 profit falls 78.34% to Rs96.12 crore

Union Bank of India on Friday reported a 78.34% fall in net profit in the March quarter as it set apart more money to cover the risk of loan default and earned less interest and non-interest income.

The bank reported a profit of Rs.96.12 crore in the quarter, compared to Rs.443.77 crore a year ago.

Net interest income (NII), or the core income a bank earns by giving loans, fell 1.71% to Rs.2,084.69 crore from Rs.2,121.05 crore last year same quarter.

The bank benefited from a tax write-back of Rs.251.18 crore, which saved it from posting a net loss. In the year-ago quarter, it paid Rs.198.58 crore in tax.

Non-interest income fell 12.8% to Rs.996.39 crore from Rs.1,143.07 crore in the same period last year.

Gross non-performing assets (NPAs) rose 85.49% to Rs.24,170.89 crore at the end of the March quarter from Rs.13,030.87 crore a year ago. The bank reported gross NPA of Rs.18,495.16 a quarter ago.

Provisions and contingencies jumped 55% to Rs.1,564.67 crore from Rs.1,009.94 crore a year ago. In the December quarter, the bank reported Rs.1,237.65 crore of provisions.

In December, the Reserve Bank of India (RBI) conducted an asset quality review across the banking sector, following which banks were asked to recognise visible stressed assets as non-performing assets (NPAs).

RBI also asked banks to make adequate provisions for these stressed assets over the third and fourth quarters of the fiscal year that ended in March.

As a percentage of total loans, gross NPAs stood at 8.7% at the end of the March quarter as compared to 7.05% in the previous quarter and 4.96% a year ago.

Net NPAs stood at 5.25% as compared to 4.07% in the previous quarter and 2.71% in the same quarter last year.On Friday, Union Bank of India shares closed at Rs.115.95 on the BSE, down 1.9% from previous close, while the benchmark index Sensex fell 1.2% to close at 25,489.57 points.