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Home / Companies / Company Results /  Union Bank of India Q3 net drops 37%, Covid-19 debt recast book at 16,725 cr

MUMBAI : State-owned Union Bank of India on Friday reported a 37% year-on-year (y-o-y) drop in December quarter net profit to 727 crore on the back of lower other income.

In its investor presentation, the bank provided comparable numbers consolidating those of erstwhile Andhra Bank and Corporation Bank with its own financials for the corresponding period when they were separate entities. These three banks merged on 1 April 2020 and the December quarter numbers reflect the financials of the amalgamated entity.

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Union Bank’s other income dropped 18% y-o-y to 3,016 crore in Q3 FY21 as recoveries from written-off accounts dropped 88% to 236 crore. The bank’s loan loss provisions declined 2% y-o-y to 4,584 crore.

“This has been a very good quarter for our bank. The total provision the bank is holding for the possible covid-19 impact on our assets is about 3,500 crore. With this we should be able to take care of probable hit on the asset quality for the quarter," said Rajkiran Rai G, chief executive, Union Bank of India.

Rai said that the bank’s restructuring book for covid-19 stress is 16,725 crore. Of this 3,272 has already been restructured till 31 December.

“For micro, small and medium enterprises (MSMEs), the total expected recast is 2878 crore, of which 1,406 is already done. In case of personal loans, expected restructuring is 3,250 crore, of which 1,866 is already restructured. For corporates, expected recast is 10,598 which is expected to be done up to June," explained Rai.

Its net interest income, or the difference between interest earned on loans and that paid on deposits, grew 5% y-o-y to 6,590 crore. The bank’s gross non-performing assets (NPAs), as a percentage of total advances, were at 13.49% in the December quarter. However, without the Supreme Court’s dispensation on asset classification, it would have reached 15.28%.

On Friday, shares of the bank rose 5.25% to close at 31.05 on the BSE, while the Sensex lost 1.26% to close at 46,285.77 points.

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