Union Bank Of India on Saturday reported a 68% year-on-year decrease in its fiscal first quarter net profit. Net profit declined to Rs 166.32 crore in the quarter ended 30 June from Rs 518.78 crore a year ago on account of higher provisions.
According to a Bloomberg poll of 19 analysts, the bank was expected to post a net profit of Rs 223.90 crore for June end quarter.
Net interest income, or the core income a bank earns by giving loans, decreased marginally to Rs 2,102.25 crore against Rs 2,130.17 crore a year ago.
Provisions more than doubled to Rs 1,352.96 crore in June quarter from Rs 642.41crore a year ago, however provision coverage ratio stood at 50% for the June ended quarter compared to 58.05% last year.
This is primarily because gross non performing assets (NPAs) increased from Rs 14,143.62 crore in June last year to Rs 27,280.90 crore this June whereas provisions increased by mere Rs 710.55 crore for the same period. Gross NPAs rose 12.86% to Rs 27,280.90 crore at the end of the June quarter from Rs 24,170.89crore in the March quarter.
As a percentage of total loans, gross NPAs stood at 10.16% at the end of the June quarter, compared with 8.70% in the previous quarter and 5.53% in the year-ago quarter.
Net NPAs stood at 6.16% in the June quarter compared with 5.25% in the previous quarter and 3.08% in the same quarter a year ago.
Capital adequacy ratio according to Basel three norms stood at 10.75% for first fiscal quarter.
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