Union Bank net rises 8% on strong NII growth

The public lender Union Bank of India reported on Friday an increase of 8.3% compared to the previous year in the net profit for the quarter in March to Rs 1,440 crore due to a strong growth in net interest income (NII).

The lender’s NII – the difference between accrued interest and accrued interest – amounted to Rs 6,769 cres, an increase of 25% on an annual basis. The net interest margin (NIM) decreased by 25 basis points (bps) sequentially to 2.75%. Operating profit increased by 11% on an annual basis to Rs 5,520 million.

Gross advances increased by 9.6% to Rs 7.16 trillion at the end of March 2022, with gold loans growing above 18% as a major driver. The lender’s current and savings account ratio (CASA) rose to 36.54% during the period under review from 36.33% in the same quarter last year. Its total deposits rose by 11.75% to Rs 10.32 trillion.

Provisions decreased by 2% on an annual basis to Rs 3,618 million. The bank showed an improvement in terms of asset quality. Gross non-current assets (NPA) as a share of total advances decreased 51 bps on a sequential basis to 11.11% and the net NPA ratio decreased by 41 bps to 3.68%.

The value of deviations during the quarter in March amounted to Rs 5,672 crore, higher than Rs 3,411 crore during the quarter ended in December. Recoveries improved to Rs 1,896 crore in Q4 from Rs 1,343 crore in Q3.

Union Bank’s shares closed at Rs 36.2 on BSE on Friday, up 7.42% from the previous close.

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