Union Bank of India’s profit rises to Rs1,531 crore

Union Bank of India witnessed a steady growth in business during the second financial quarter and half year of 2018-19. Net Profit for July-September 2018 improved by Rs 139 crore from Rs 1531 crore in July-September 2017, while Global Business grew by 3.1% to Rs 717656 crore, Savings Deposits by 10.1% to Rs 118424 and Domestic Advances by 9.0% to Rs 302007 crore – all in the same quarter this year.

The Bank’s Half-Year performance during H1FY 2018-19 saw Net Interest Income up by 12.2% on y-o-y basis to Rs 5120 crore from Rs 4564 crore in H1 2017-18, while Net Profit improved by Rs 269 crore from Rs 1414 crore in the same period.

Asset Quality witnessed Cash Recovery and Upgradation increase in July-September 2018 by 180.4% to Rs 1615 crore, as against Rs 576 crore during July-September 2017. Gross NPA stood at Rs 15.74% on September 30, 2018, as against 16.00% on June 30, 2018. Net NPA ratio stood at 8.42% on September 30, 2018, as against 8.70% on June 30, 2018, while Provision Coverage Ratio stood at 57.66% on September 30, 2018, as against 56.49% on June 30, 2018.

Rajkiran Rai G, Managing Director & CEO, Union Bank of India, told media here today that, in keeping pace with India’s Digital transformation, the bank has developed in-house mobile-based recovery app; — To aid NPA recovery by geo-tagging of location; and OTS calculator – to calculate minimum settlement amount and NPV for NPA borrowers.

Replying to media queries, Rai said Infrastructure is the biggest NPA sector and the Bank has 80% exposure to thermal power plants in the affected power sector with NPAs being highlighted also in the public domain. “We have Rs 6,000 crore exposure in the power sector of which Rs 5,000 has become NPA already. We have identified a good number of Assets which, if anyone is showing interest in for ‘full cash deal’, we will go ahead with the sale of the same,” he said.

“Slippages are around Rs 600 crore this quarter and expected to be similar in the third quarter but lesser in the 4th quarter this year,” he said, adding “Our earnings are likely to see improvement and while this quarter – Q2FY2018-19 — has no major recoveries — it should be the new normal for Union Bank — we are confident that the third quarter should witness recoveries.”

Mobile banking users grew by 74% on y-o-y basis, and 76% share of ‘transactions through digital channels’ occurred in ‘overall transactions.’ The bank has 4299 branches and total 12,201 ATMs including 5407 micro-ATMs and 3466 ‘talking’ ATMs upto September 30, 2018.

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