MUMBAI: Public sector Union Bank of India has reported a slew of muted numbers in the September quarter with the net income falling 10 percent and muted interest income, despite the bank posting over 54 percent fall in provisions.
The bank, a likely candidate for a merger with another public sector lender as the government plans to create more larger banks, stated that its net income fell 10 percent on-year to Rs 4250 crore, while revenue remained flat at Rs 26,650 crore, down 20 bps from Rs 26,700 crore.
The newly appointed chief executive officer Asheesh Pandey, however, declined to explain the bank's poor performance on almost all key metrics, despite media queries.
The asset quality improved significantly, with provisions for NPAs plunging by 54.3 percent. Gross NPA ratio improved by 170 bps to 3.29, and net NPA ratio fell to 70 bps to 0.55 percent. Fresh slippages came down to Rs 1,980 crore from Rs 2,200 crore, indicating better asset quality management. As a result, total provisions for bad loans plunged 54.3% to Rs 5,260 crore from Rs 11,520 crore/The reported fresh slippages of Rs 1,980 crore in the current quarter, down from compared to Rs 2,200 crore in the previous quarter.
The bank saw its interest expenditure increasing 4.7 percent to Rs 17,838 crore and so did the operating expenses which increased 4.55 percent to Rs 6,994 crore. Net interest income declined 3 percent to Rs 8,812 crore from Rs 18,459 crore, while operating profit fell 1.37 percent to Rs 6,814 crore.
The cost of deposits dropped marginally to 5.48 percent and the net interest margin fell to 2.67 percent, while the cost-to-income ratio rose to 50.65 and yield on advances slipped to 8.34 percent even though the credit cost dropped to 0.22 percent.
Total business of the bank was flat at Rs 22.09 trillion up from Rs 21.40 trillion. Savings deposits rose 1.31 percent to Rs 3,38,844 crore, while current deposits fell 8.11 percent to Rs 63,010 crore. Retail advances jumped 23.98 percent to Rs 2,38,506 crore of which MSME advances rose 14.88 percent to Rs 1,47,395 crore, agriculture advances rose 12.15 percent to Rs 1,68,405 crore, taking the gross advances to Rs 9,75,207 crore, which was up 4.99 percent.
