Union Bank stock down 12% on bad loan worries

Union Bank stock down 12% on bad loan worries

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.

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 352.52 crore for the second quarter ended 30 September.

The total income of the lender for the quarter rose to 5,611.37 crore, from 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 816.94 crore from 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 11,011.05 crore from 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 1,820 crore in the September quarter of which a major chunk was from accounts with less than 5,00,000 exposure.

Dinesh.n@livemint.com

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