Public sector lender Union Bank ofIndia disappointed Street on Saturday as it posted net loss of
Rs 1,250 crore for December quarter against profit of Rs 104 crore in previous
year.
Profit included
investment depreciation of Rs 700 crore & Rs 991 crore of additional
provision for 18 accounts referred to National Company Law Tribunal, as per RBI
list-II, the bank said.
It has provided
entire amount of additional provision for NCLT accounts upfront which was to be
spread till March 2018. Lower other income & operating income, tax reversal
and higher provisions dented profitability, but good growth in net interest
income restricted losses.
Net interest income,
the difference between interest earned and interest expended, grew by 19.3
percent to Rs 2,548.3 crore compared to Rs 2,136.6 crore in same quarter last
year due to growth in net interest margin and loans.
The bank said global
loan growth was 13.5 percent YoY at Rs 3,14,474 crore, with domestic advances
growing 12.5 percent at Rs 2,81,028 crore as on December 31, 2017.
Total deposit of the
bank grew by 4.9 percent year-on-year to Rs 3,98,518 crore, with CASA deposits
growth of 4.6 percent, it added.
Global net interest
margin improved 15 basis points sequentially and 22 bps YoY to 2.23 percent in
Q3 while domestic net interest margin improved to 2.34 percent, from 2.19
percent in previous quarter and 2.04 percent a year ago.
Asset quality
deteriorated in the quarter gone by. Gross non-performing assets (NPAs) were
lower at 13.03 percent in Q3 (from 12.35 percent in previous quarter) and net
NPAs were at 6.96 percent (against 6.7 percent).
In absolute terms,
gross NPAs fell 7 percent sequentially to Rs 40,988.4 crore and net NPAs
declined 5 percent to Rs 20,428.2 crore compared to previous quarter.Slippages
at the end of December quarter were higher at Rs 4,187 crore, compared to Rs
2,686 crore as of September quarter.
Provisions for bad
loans during the quarter increased sharply by 59.4 percent year-on-year to Rs
2,521 crore, but declined 27.2 percent sequentially. Provision coverage ratio
stood at 57.12 percent as of December 2017, improved from 50.62 percent in
year-ago and 56.06 percent in previous quarter, the bank said.
Union Bank further
said taking into account its provisioning divergence, net profit of Rs 555
crore reported earlier for FY17 now became a loss of Rs 373 crore.Gross NPA
divergence stood at Rs 2,850 crore, net NPA at Rs 1,835 crore and divergence in
provisioning at Rs 1,014 crore as of March 31, 2017.
Other income (non-interest
income) slipped 34.8 percent to Rs 873.11 crore and operating profit declined
10.6 percent to Rs 1,654.6 crore compared to year-ago.The bank saw tax reversal of Rs 350 crore for the quarter against tax
expenses of Rs 77.14 crore in same quarter last year.
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