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Home >Companies >Company Results >Union Bank of India Q4 results: Lender posts 1,330 crore net profit, asset quality improves

Union Bank of India posted a standalone net profit of 1,329.77 crore for the quarter ended March 31, 2021. The state-run lender has reported a loss of 2,503.18 crore in the corresponding period of previous fiscal.

Union Bank of India clarified that the financial results for fiscal FY21 and its fourth quarter are not comparable to corresponding figures in the year-ago period as "working results for the quarter/year ended March 31, 2021, include operations of erstwhile Andhra Bank and erstwhile Corporation Bank". The central government had approved the scheme of amalgamation of the three banks on March 4, 2020, which came into effect on April 1, 2020.

"Accordingly, the difference of 1,309.60 crore between the net assets of amalgamating banks and the amount of shares issued to shareholders of the amalgamating banks has been recognised as Amalgamation Reserve in the opening balance sheet as on April 1, 2020. The bank has considered this amount under CET I for the purpose of calculation of CRAR," Union Bank of India said in a regulatory filing.

Total income during the quarter under review was 20,025.99 crore as opposed to 11,306.99 crore in the year-ago period. Net interest income for Q4 FY21 stood at 5,402.86 crore, against 2,878.11 crore in Q4 FY20.

Operating profit for the March quarter of FY21 was recorded at 5,179.87 crore, as opposed to 2,652.64 crore in the same period of FY20.

The bank saw its asset quality improve, with gross non-performing assets (NPAs) decline to 13.74 per cent of the gross advances as of March 31, 2021, as against 14.15 per cent by the end of corresponding period previous fiscal. Net NPAs or bad loans came down to 4.62 per cent from 5.49 per cent.

The bank said it has not classified the borrower account of Delhi Airport Metro Express (DAMEPL) as NPA in accordance to a Supreme Court order. However, following RBI directives dated June 21, 2019, the bank has not treated 94.9 crore as NPA against DAMEPL and made the provisions to the tune of 43.31 crore in accordance with the Income Recognition and Asset Classification and Provisioning (IRAC) norms, notionally treating the account as NPA.

"Further, the bank also has exposure of 3,269.09 crore with two borrower accounts belonging to another business group. In terms of NCLT, Kolkata bench order dated 21 October 2020, the bank has not declared these accounts as NPA and maintained status quo until further orders. As a prudence, the bank has made a provision of 549.45 crore pending final decision," it added.

On the impact of Covid-19 pandemic, Union Bank of India said, "Though the situation continues to remain uncertain, the bank is continuously monitoring the situation and taking all possible measures to ensure continuance of full-fledged banking operations. The management believes that there would not be any significant impact on bank's performance in future and going concern assumptions."

Union Bank of India closed the day's trade at 35.60, up 0.15 points or 0.42

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