Union Bank of India’s net profit jumps 18% to ₹3,328 crore in March quarter of FY24

MUMBAI: State-owned Union Bank of India (UBI) on Saturday reported an 18.36 per cent growth in its consolidated net profit for the March quarter to Rs 3,328 crore, helped by lower provisions.

For the fiscal 2023-24, the lender reported a consolidated net profit of Rs 13,797 crore against Rs 8,512 crore in the year-ago period.

In the quarter under review, its standalone net profit increased to Rs 3,311 crore from Rs 2,782 crore a year ago.

The core net interest income grew 14.38 per cent to Rs 9,437 crore on an 11.7 per cent growth in advances and widening of net interest margin to 3.10 per cent from 2.97 per cent in the yearago period.

Its managing director and chief executive A Manimekhalai

said that for FY25, it is aiming for a credit growth of 11-13 per cent and deposit growth to be between 9-11 per cent compared to 9.3 per cent in FY24.

It, however, expects a fall in NIMs to 2.8-3 per cent, she said, adding that the targets will be reviewed midway through the year. The non-interest income declined by over 10 per cent to Rs 4,707 crore, primarily due to halving of recoveries from written off accounts. For FY25, the bank is targeting the overall recoveries to come at Rs 16,000 crore against over Rs 18,000 crore in FY24.

The overall provisions declined to Rs 3,222 crore from Rs 4,041 crore in the year-ago period. The fresh slippages increased to Rs 3,202 crore from the Rs 2,687 crore a year ago.

The bank’s gross NPA ratio declined to 4.76 per cent against 7.53 per cent in the year-ago period, and Manimekhalai said it will be targeting to close FY25 with the number under 4 per cent. The RBI’s newly introduced proposals on the project finance front will not have a big impact on the bank’s financials, she said.

She said about 28 per cent of the corporate loan book is project finance loans at present, of which 68 per cent is to projects that have been completed. Also, the RBI is proposing for a phased implementation of the provisioning requirements, which will be of help.

The bank has an overall pipeline of over Rs 40,000 crore, which will ensure that the credit growth aims are met, she said, adding that there is demand from sectors like data centres, real estate, steel and renewables.

The overall capital adequacy of the bank stood at 16.97 per cent, with the core buffer at 13.65 per cent.

In the quarter under review, its standalone net profit increased to Rs 3,311 crore from Rs 2,782 crore a year ago