Union Bank of India: Strategic Decisions Boost Quarterly Profits

Union Bank of India reported a 9.7% rise in net profits for the December quarter, aided by a reduction in provisions and strategic moves towards profitability. Despite lower deposit and credit growth, non-interest income rose by 2.82%. A newer method for calculating key metrics was also introduced.

State-owned Union Bank of India showcased a promising financial performance for the December quarter, recording a 9.7% rise in net profit amounting to Rs 5,073 crore. This financial uplift was predominantly driven by a substantial reduction in provisions, said officials on Wednesday.

The bank's core net interest income witnessed a slight 0.95% increase, bringing it to Rs 9,328 crore, despite a modest credit growth of 7.13% below the broader banking system and a minor contraction in net interest margin to 2.76%. Non-interest income also saw an increase, reaching Rs 4,541 crore.

Managing Director and CEO Asheesh Pandey highlighted efforts to prioritize profitability over sheer business expansion, including shedding significant bulk deposits and implementing a new calculation method for key performance indicators. The bank also made significant strides in reducing fresh slippages and improving asset quality, despite challenges in matching anticipated provisions under the upcoming expected credit loss system.

(With inputs from agencies.)