UBI’s Net Profit Falls 30% on Higher Provisioning
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.