Union Bank Of India Reports 90% Surge in Q2 Net Profit Supported By NII Growth

In the latest financial report, Union Bank of India, a state-owned institution, has revealed an impressive 90 per cent year-on-year surge in net profit, amounting to Rs 3,511.4 crore for the second quarter ending on 30 September 2023. This marks a significant growth compared to the Rs 1,848 crore net profit recorded during the same quarter in the previous year. Concurrently, the bank experienced a 10 per cent increase in net interest income (NII), rising to Rs 9,126.1 crore from Rs 8,305 crore in the corresponding quarter of FY23.

The bank has made substantial improvements in its asset quality, with the gross non-performing asset (GNPA) ratio decreasing to 6.38 per cent during the September quarter, down from 7.34 per cent in the June quarter. Likewise, the net non-performing asset (NPA) ratio has seen a positive shift, declining to 1.30 per cent from 1.58 per cent quarter-on-quarter.

In monetary terms, the gross NPA figure stood at Rs 54,012.3 crore, a reduction from Rs 60,103.7 crore reported in the previous quarter. Net NPA amounted to Rs 10,421 crore, down from Rs 12,137.9 crore quarter-on-quarter. Provisions reported were Rs 1,767.9 crore for the quarter, which marked a decrease from Rs 2,005 crore quarter-on-quarter and Rs 4,076.8 crore on a year-on-year basis.

Current Account Savings Account (CASA) deposits have displayed growth of 4.45 per cent year-on-year, contributing to the expansion of the bank's total deposit base, which reached Rs 11,37,628 crore as of 30 September 2023. The total business of the bank demonstrated a 9.24 per cent year-on-year increase, with both gross advances and total deposits growing by approximately 9 per cent year-on-year.

Within the credit segments, the bank reported positive growth in retail, agriculture, and MSME (Retail, Agriculture, and Micro, Small, and Medium Enterprises). These segments experienced growth rates of 14.68 per cent, 15.04 per cent and 14.03 per cent, respectively, on a year-on-year basis.

Regarding capital ratios, the capital risk-weighted ratio (CRAR) showed a significant improvement, rising from 14.50 per cent as of 30 September 2022, to 16.69 per cent as of 30 September 2023. Furthermore, the CET1 ratio increased to 13.05 per cent as of 30 September 2023, up from 10.67 per cent as of 30 September 2022. The bank's return on assets and return on equity displayed notable improvements, reaching 1.07 per cent and 17.97 per cent, respectively, during the second quarter of FY24.

These results were reported after the close of market hours. Union Bank of India's shares concluded at Rs 99.95, marking a 5.49 per cent increase on the BSE, underlining the bank's robust financial performance and efficiency in managing its assets and equity.