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Union Bank stock down 12% on bad loan worries

Union Bank stock down 12% on bad loan worries
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First Published: Mon, Oct 24 2011. 09 57 PM IST

Updated: Mon, Oct 24 2011. 09 57 PM IST
Mumbai: Shares of public sector lender Union Bank of India plunged nearly 11.56% on Monday on the Bombay Stock exchange (BSE) after it reported a sharp rise in its bad loans in the quarter ended September, even as the bank posted a 16.19% rise in net profit.
The shares lost 11.56% to close at Rs 212.2 apiece on BSE, when the benchmark index, Sensex gained 0.92% to close at 16939.28 points. The exchange’s banking index lost 0.4% to close at 11,049.61 points.
Gross non-performing assets (NPAs) of the bank in the quarter rose to 3.49% from 2.79% in the corresponding quarter last year, while the net NPAs surged to 2.04% from 1.18%.
Union Bank posted 16.19% rise in net profit to Rs 352.52 crore for the second quarter ended 30 September.
The total income of the lender for the quarter rose to Rs 5,611.37 crore, from Rs 4,461.88 crore in the same period last fiscal, Union bank said in a filing to the Bombay Stock Exchange, on Monday.
During the six months ended 30 September, the bank’s net profit fell 9.71% to Rs 816.94 crore from Rs 904.81 crore in the same period last fiscal, it said.
The total income during the first six months of the current fiscal rose to Rs 11,011.05 crore from Rs 5,582.63 crore in the same period last fiscal, it added.
“The worst is behind us. We don’t expect any uncertainties on NPAs here on,” S.S. Mundra, executive director, told reporters.
Gross NPAs would come down to 2.65% by March-end from 3.49% now, as bank undertakes stringent recovery measures, Mundra said.
The bank, which moved to system-recognised NPAs this month, said there were slippages worth Rs 1,820 crore in the September quarter of which a major chunk was from accounts with less than Rs 5,00,000 exposure.
Dinesh.n@livemint.com
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First Published: Mon, Oct 24 2011. 09 57 PM IST