Union Bank of India Q3 net profit zooms to Rs 575 cr on higher recoveries, interest income

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Mumbai, Feb 10 () Union Bank of India on Monday reported a net profit of Rs 575 crore for the quarter ended December, helped by better recoveries and higher interest income.

The state-run bank had reported a profit of Rs 153 crore in the year-ago period.

"In this particular quarter (Q3) we were helped by good recoveries of Rs 2,000 crore from Essar Steel, Ruchi Soya and Prayagraj Power Generation. There was also a very steady improvement in the operating efficiency," the bank's managing director and CEO Rajkiran Rai G told reporters here.

Total cash recovery and upgradation stood at Rs 2,837 crore during the quarter, while net interest income grew 25.7 per cent to Rs 3,134 crore from Rs 2,439 crore in the year-ago period.

Domestic net interest margin (NIM) improved to 2.55 per cent from 2.23 per cent.

The gross non-performing assets (NPAs) declined to 14.86 per cent as compared with 15.66 per cent a year ago, while net NPAs stood at 6.99 per cent as against 8.27 per cent.

The bank's provision coverage ratio (PCR) stood at 67.42 per cent during the quarter under review as against 56.84 per cent a year ago.

Fresh slippages during the quarter increased to Rs 5,112 crore, of which Rs 2,300 crore was on account of one large housing finance company that slipped into NPA.

Rai said the bank expects recoveries of Rs 3,000 crore from various stressed accounts in the fourth quarter.

"Actually, our total recoveries for the nine months have been Rs 4,910 crore (recoveries and upgradations). We are expecting another Rs 3,000 crore of recoveries in this quarter (Q4) both from NCLT and non-NCLT accounts. So, we can close the year at about Rs 8,000 crore," he said.

The lender is expecting a recovery of Rs 700-800 crore from a large steel account which is very close to resolution, he said.

The bank's special mention accounts 2 (SMA2) book stood at Rs 10,379 crore. It has signed intercreditor agreement in 24 accounts so far.

The lender's gross advances grew 5.8 per cent to Rs 3,36,034 crore, driven by retail segment which increased by 10 per cent during the quarter.

Rai said the process of merger of Andhra Bank and Corporation Bank with the bank is on track.

Shares of Union Bank of India on Monday closed 4.19 per cent higher at Rs 50.95 apiece on the BSE. KPM HV RVK