UBI’s Net Profit Falls 30% on Higher Pro­vi­sion­ing

The Economic Times - - Finance & Commodities - San­gita.Me­hta @times­group.com

Mumbai: Union Bank of In­dia has re­ported a 30% year-on-year drop in quar­terly net profit, mainly due to pro­vi­sion­ing for bad loans, and said “delin­quen­cies could go up” over the next few quar­ters.

For the quar­ter ended June 30, net profit stood at .₹ 116.5 crore, the bank said on Thurs­day. Net in­ter­est in­come dur­ing the quar­ter stood at .₹ 2,243 crore, up 6.7% from a year ago, while non-in­ter­est in­come stood at .₹ 1,414 crore, up 36%.

But the hit due to pro­vi­sions is likely to go up. Over the next three quar­ters, the bank will have set aside .₹ 2,460 crore for the 11 ac­counts that are be­ing re­ferred to the bank­ruptcy court, fol­low­ing di­rec­tions from Re­serve Bank of In­dia. Giv­ing an out­look on bad loans, man­ag­ing di­rec­tor Ra­jki­ran Raj said, “It is dif­fi­cult to pre­dict the likely de­fault. But we es­ti­mate that at most delin­quen­cies could go up by 4% of to­tal ad­vances.” To­tal stressed loans of the bank stood at about 14%. The bank has to­tal ex­po­sure of .₹ 7,460 crore in 11 large ac­counts.

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