Union Bank of India on Thursday said its second quarter net loss stood at Rs1,194 crore on account of higher provisioning.
The bank posted a net loss of Rs1,194 crore for the quarter against a profit of Rs139 crore a year ago.
Loss was higher as Bloomberg poll of 7 analysts had estimated a loss of Rs293.5 crore.
"The primary reason for the loss is divergence in provisions of Rs1,587 crore for FY19 as specified by the Reserve Bank of India (RBI). This was taken into account in this quarter," said Rajkiran Rai G., chief executive, Union Bank of India.
The bank’s loans to Dewan Housing Finance (DHFL) of around Rs2,000 crore has turned NPA in the third quarter of FY20 or in the current quarter, he added.
Net interest income, or the difference between interest earned on loans and that paid on deposits, for Jul-Sep quarter increased 16.5% to Rs2,906 crore from Rs2,494 crore in the corresponding period last year.
Other income, which includes core fee income, increased 27.10% to Rs1,143.2 crore in the three months from Rs899.44 crore a year ago.
Gross non-performing assets (NPAs), as a percentage of total advances, were at 15.24% in the September quarter compared with 15.18% in the June quarter and 15.74% in the year-ago quarter.
Post-provision, the net NPA ratio was at 6.98% against 7.23% in the Apr-Jun quarter and 8.42% in the year-ago quarter.
Capital Adequacy ratio of the bank under Basel III is 15.14% as on September 30, 2019 as against 11.43% as on June 30, 2019 compared to minimum regulatory requirement of 10.875%.
On Thursday, shares of the bank lost 0.76% to close at Rs52.30 apiece, while the benchmark Sensex index gained 0.42% to close at 40,286.48 points.