Union Bank of India Q4 profit rises 23% aided by stake sale in insurance arm, lower cost of deposits

State-owned Union Financial institution of India on Friday reported a 22.68% soar in consolidated web revenue to ₹1,557.09 crore for the March quarter 2021-22 aided by a ₹627 crore acquire by way of a stake sale in its insurance coverage arm and advantages by way of low value of deposits.

On a standalone foundation, the lender reported 8.26% progress in web revenue at ₹1,440 crore. The lender ended FY22 with a 80% soar in revenue after tax at ₹5,232 crore.

Core web curiosity earnings (NII) grew 25.29% at ₹6,769 crore, on the again of 9.60% progress in advances and the online curiosity margin widening by 0.38% to 2.75%.

Chief Government and Managing Director G. Rajkiran Rai informed reporters that the price of deposits got here down by as much as 0.70% in the course of the quarter, which helped limit the curiosity bills progress to three.30%, and benefitted in widening the NII quantity.

The opposite earnings slid by 25.10% to ₹3,243 crore as a result of reverses on the treasury operations amid the rising rate of interest surroundings.

Mr. Rai mentioned the financial institution booked a acquire of ₹627 crore by way of a stake sale in India First Life Insurance coverage in March, however the identical was utilised to extend the provisions to cowl for mortgage reverses, and added that the supply protection ratio had now climbed to greater than 83%.

The general provisions got here at ₹3,618 crore for March 2022 quarter as in opposition to ₹2,549 crore within the previous December quarter and ₹3,683 crore within the year-earlier interval.

It has a ₹2,700 crore publicity to the Future Group throughout accounts which has been now labeled as non-performing, and the provisions cowl on the identical stands at 58% now, Mr. Rai mentioned, including that the publicity to the troubled financier Srei Group was at ₹2,492 crore and the supply cowl on the identical was at 86%.

One unnamed chunky publicity to a company account dented its contemporary slippages, Mr. Rai mentioned, including that the massive company slippages had been ₹2,557 crore, retail got here at ₹648 crore, agriculture at ₹1,024 crore and medium-sized companies at ₹1,443 crore.

Gross non-performing property ratio narrowed to 11.11% as on March 31 from 13.74% a 12 months earlier, and the financial institution is concentrating on to trim it down additional to 9% by finish of FY23, Mr. Rai mentioned.

He mentioned the financial institution was concentrating on a credit score progress of 10-12%, which is able to embrace an 8-10% rise in company advances, and the NIM to be at 3%.

“The financial institution administration feels the mortgage loss provisions even have to return down within the new fiscal 12 months as a lot of the dud advances are ageing, and can take a look at decreasing slippages, pushing up restoration efforts and do technical write-offs the place doable,“ Mr. Rai mentioned, including that no NPA had been transferred but to NARCL.

From a credit score progress perspective, a 0.50-1% hike in lending charges wouldn’t have an effect on the retail mortgage progress however may influence company loans within the brief time period, Mr. Rai mentioned.

Within the 12 months passed by, the financial institution rationalised over 700 branches and 1,500 automated teller machines (ATMs), majorly due to the doubling up of presence after the amalgamation of Company Financial institution and Andhra Financial institution with itself, Mr. Rai mentioned, including that such efforts would proceed.

General capital adequacy stood at 14.52% with the core tier-I capital at 10.63%. Mr. Rai additionally mentioned that the lender was concentrating on to achieve market share throughout the brand new fiscal on its digital and bodily distribution strengths.

The financial institution scrip settled at ₹36.20, up 7.42% from the earlier shut, on the BSE.

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