Union Bank Q1 netdown 30% at ~116 cr

Public sector lender Union Bank of India’s net profit for the quarter ended June (Q1) dipped 30.1 per cent to ~116 crore on a sharp rise in provisions for bad loans and taxes. The Mumbai-based lender had posted net profit of ~166 crore in the year-ago quarter.

Its asset quality came under pressure due to slippages in the quarter. Sequentially, gross non-performing assets (GNPAs) rose ~3,574 crore to ~37,286 crore (12.63 per cent) from ~33,712 crore (11.17 per cent) at the end of March 2017. Gross NPAs stood at ~27,280 crore (10.16 per cent) at the end of June 2016.

The money set aside for bad loans also went up substantially (~370 crore) in Q1 to ~1,875 from ~1,505 crore in January-March 2016.

The Union Bank stock closed five per cent down at ~134 per share on the BSE. Its net interest income (NII), the difference between interest earned and expenses, rose by 6.7 per cent in the reporting quarter to ~2,243 crore from ~2,102 crore in the year-ago quarter, according to quarterly results filed the with BSE. Other income, comprising treasury revenues, fees and commissions rose 36 per cent to ~1,414 crore from ~1,039 crore.

Provisions for non-performing assets (NPAs) went up sharply by 39.3 per cent to ~1,875 crore in Q1, from ~1,346 crore in April-June 2016. The provision coverage ratio (PCR) stood at 51.13 per cent in Q1, up from 50 per cent in June 2016. PCR was at 51.41 per cent at the end of March 2016.

Its tax expenses more than doubled to ~236 crore in the reporting quarter from ~105 crore in the year-ago quarter.