Union Bank of India Q2 profit dips 73% at Rs176 crore
New Delhi: Public sector lender Union Bank of India on Friday said its net profit fell by 73.2% to Rs176.67 crore for the second quarter ended 30 September, 2016, due to higher provisions for bad loans. The bank had reported a net profit of Rs658.16 crore for the same quarter in the previous fiscal.
“Total income has increased to Rs9,347.58 crore for the quarter ended 30 September, 2016, from Rs9,100.90 crore for the same quarter a year ago,” it said in a regulatory filing.
Bank’s provisions for bad loans and contingencies spiked over three-times to Rs1,620.29 crore for the quarter from Rs432.51 crore in the year-ago period. The shares of Union Bank of India closed at Rs134.35, 1.97% down on BSE on Friday.
The gross non-performing assets (NPAs) increased to 10.73% of the gross loans as on September 2016, from 6.12% year ago. Value-wise, gross NPAs were Rs29,862.05 crore, up from Rs15,541.17 crore.
Net NPAs or bad loans were 6.39% of the net advances as on 30 September as against 3.39% year ago. In absolute terms, net NPAs stood at Rs16,947.89 crore as on September 2016, compared with Rs8,334.86 crore from a year earlier.
Total assets of the bank as on 30 September, 2016 increased to Rs4.31 lakh crore from Rs3.93 lakh crore at the end of September 2015. During the said quarter, the bank also raised additional tier-I capital of Rs1,000 crore by way of issuance of Basel-III compliant perpetual debt instruments.
It also raised tier-II capital of Rs1,000 crore by way of issuance of Basel-III compliant bonds.
Union Bank said its board in a meeting held on Friday approved raising Rs3,500 crore capital over and above the capital already raised, by way of equity and or additional tier-I or tier II capital during the current fiscal. It has also been authorised to review the capital plan for 2016-17 as well as to meet any shortfall in equity capital raising through additional tier I and tier II capital within the overall additional capital requirement of Rs3,500 crore.
Further, Union Bank said the board of directors also authorised it to raise capital by public issue, rights issue, private placement, including preferential allotment of shares to the government or other institutions during the current fiscal.