Union Bank Shifts Focus to Profit Over Growth Amid Sharp Profit Surge

Union Bank of India reported a 9.7% increase in profit for the December quarter, reaching Rs 5,073 crore, driven by reduced provisions. The bank's focus on profitability over growth tempered deposit and credit figures. A systemic change in financial computations and lower slippages contributed significantly to the profit surge.

State-run Union Bank of India has announced a considerable profit increase of 9.7% for the December quarter, bringing its consolidated net profit to Rs 5,073 crore. This profit rise is largely attributed to a sharp fall in provisions, according to the bank's latest financial report released on Wednesday.

The bank's core net interest income saw a modest growth of 0.95%, totaling Rs 9,328 crore, although this fell short of the banking system's overall credit growth of 7.13%. Union Bank Managing Director and CEO Asheesh Pandey highlighted a strategic focus on profitability rather than sheer business expansion, which has been a fundamental driver in their financial direction.

In terms of operational efficiency, Union Bank reported improvements in its gross non-performing assets ratio and a substantial decline in fresh slippages. The bank also noted a gap in provisions under an evolved computation system, signaling a pivotal shift in financial strategy to sustain future growth.

(With inputs from agencies.)