Mumbai: Union Bank Of India Ltd on Saturday reported a 68% year-on-year decrease in its fiscal first quarter net profit. Net profit declined to Rs166.32 crore in the quarter ended 30 June from Rs518.78 crore a year ago on account of higher provisions.
According to a Bloomberg poll of 19 analysts, the bank was expected to post a net profit of Rs223.90 crore for June end quarter.
Net interest income, or the core income a bank earns by giving loans, decreased marginally to Rs2,102.25 crore against Rs2,130.17 crore a year ago.
Provisions more than doubled to Rs1,352.96 crore in June quarter from Rs642.41crore a year ago, however provision coverage ratio stood at 50% for the June ended quarter compared to 58.05% last year.
This is primarily because gross non performing assets (NPAs) increased from Rs14,143.62 crore in June last year to Rs27,280.90 crore this June whereas provisions increased by mere Rs710.55 crore for the same period. Gross NPAs rose 12.86% to Rs27,280.90 crore at the end of the June quarter from Rs24,170.89crore in the March quarter.
As a percentage of total loans, gross NPAs stood at 10.16% at the end of the June quarter, compared with 8.70% in the previous quarter and 5.53% in the year-ago quarter.
Net NPAs stood at 6.16% in the June quarter compared with 5.25% in the previous quarter and 3.08% in the same quarter a year ago.
Capital adequacy ratio according to Basel three norms stood at 10.75% for first fiscal quarter.
Shares of Union Bank of India closed 3.63% up at Rs137.15 on BSE, while the benchmark Sensex increased 1.31% to 28,078.35 points on Friday.