Union Bank Q1 net up 11% on interest income, tax write-back (Eds: Adding quotes, additional details) Mumbai, Aug 10 (PTI) State-run Union Bank of India today posted a 11 per cent rise in net profit at Rs 130 crore for June quarter, helped by higher interest income and tax write-back. It had reported a profit after tax of Rs 117 crore in the same period last year.
"Given the circumstances, we feel that this profitability is sustainable," bank's managing director and chief executive officer, Rajkiran Rai G, told reporters here.
The lender's net interest income (NII) rose 17 percent to Rs 2,626 crore, from Rs 2,243 crore, while its interest income rose to Rs 8,700 crore, from Rs 8,153 crore. The bank said the interest income for the quarter includes an amount of Rs 274.43 crore towards the recovery of non-performing asset (NPA) in accordance with resolution plan approved by the National Company Law Tribunal (NCLT).
Tax write-back in the quarter stood at Rs 270 crore, it said. Domestic net interest margin of the lender improved to 2.34 percent, from 2.20 percent in the year-ago quarter. Gross NPA worsened to 16 percent, compared with 12.63 percent last year, while net NPA increased to 8.70 percent, against 7.47 percent.
"For us, NPAs have peaked. All large corporate bad loans have been recognized. We see the NPAs going down going ahead," said Rai.
The provisioning for NPAs in the reporting quarter was at Rs 1,803 crore, compared with Rs 1,876 crore last year. Fresh slippages rose marginally to Rs 4,652 crore, from Rs 4,453 crore in the year-ago quarter. The bank recovered Rs 1,252 crore worth of loans, while upgraded Rs 371 crore during the quarter. Its exposure to all NCLT accounts is Rs 10,806 crore and it expects to recover Rs 3,500 crore from accounts under insolvency resolution process in FY19, according to Rai.
On non-core assets, he said the bank plans to raise Rs 360 crore in the current financial year. The bank's scrip ended 4.10 percent lower at Rs 85.45 apiece on the BSE today, against 0.41 percent fall in the benchmark.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)