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Union Bank stories Rs 517-cr web revenue; curiosity earnings rises, asset high quality improves

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The financial institution’s provisions got here down 25% YoY and 14% QoQ to Rs 4,218 crore.

The Union Bank of India on Friday reported a web revenue of Rs 516.6 crore for the September quarter of the present monetary yr towards a lack of Rs 994 crore within the corresponding interval final yr. The financial institution noticed wholesome progress in curiosity earnings and its asset high quality additionally improved. Its working revenue elevated 2% yr on yr (YoY) and eight.4% quarter on quarter (QoQ) to Rs 4,375 crore. The curiosity earnings (NII) elevated 6% YoY to Rs 6,293 crore, however remained flat sequentially.

MD and CEO Rajkiran Rai G mentioned the financial institution anticipated 2.5%-3% of advances to return up for debt restructuring. “We are expecting Rs 16,000 crore loans to come up for restructuring. It should be 2.5-3% of our advances,” he mentioned. The Reserve Bank of India had earlier allowed restructuring of private and company loans owing to the stress brought on by the Covid-19.

The financial institution’s provisions got here down 25% YoY and 14% QoQ to Rs 4,218 crore. Its provision protection ratio (PCR) improved 884 foundation factors (bps) YoY to 83.1%.

Its asset high quality confirmed enchancment within the quarter underneath evaluation. Gross non-performing belongings (NPAs) ratio improved 24 bps to 14.71%, in comparison with 14.95% within the earlier quarter. Similarly, web NPAs ratio got here down 84 bps to 4.13% from 4.97% within the June quarter. “I am expecting net NPA to remain below 5% in the next two quarters,” Rai mentioned.

The lender’s web curiosity margin (NIM) remained flat at 2.51%, in comparison with 2.52% within the September quarter final yr. NIM declined 17 bps quarter-on-quarter foundation, in comparison with 2.68% within the June quarter. The price of funds improved 88 bps to 4.82%, in comparison with 5.70% within the September quarter final yr.

Advances grew 1.9% YoY to Rs 6.51 lakh crore. Retail advances grew by 7.8% YoY to Rs 1.17 lakh crore, in comparison with Rs 1.08 lakh crore within the September quarter final yr. “We are expecting 4-6% credit growth at the end of the financial year 2021,” mentioned Rai.

Deposits grew 4% YoY to Rs 8.86 lakh crore within the September quarter. Current account financial savings account (CASA) deposits grew 12.4% YoY to Rs 3.06 lakh crore.

The capital adequacy ratio of the lender stood at 12.84% on the finish of the September quarter, in comparison with minimal regulatory requirement of 10.875%.

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