Union Bank Q3 profit surges to Rs 575 crore, net interest income up 26%

State-owned lender Union Bank of India on Monday reported a sharp 275 per cent growth in its net profit at Rs 575 crore for the third quarter ended December 31, 2019, compared to Rs 153 crore in the same quarter last year. The bank had posted net loss of Rs 1,194 crore in September quarter of this fiscal.

Net interest income, the difference between interest earned and interest expended, increased by 25.7 per cent to Rs 3,134 crore as compared to Rs 2,493 crore in Q3 FY19. Domestic net interest margin (NIM) for Q3 FY20 improved to 2.55 per cent as compared to 2.23 per cent in Q3 FY19.

Non-interest income rose marginally by 1.53 per cent to Rs 1,112 crore versus Rs 1,095 crore in December quarter of last fiscal.

Operating profit for October-December period increased by 32.7 per cent to Rs 2,402 crore as compared to Rs 1,810 crore in corresponding period of last fiscal.

During the quarter under review, total expenses climbed to Rs 8,339 crore against Rs 7,762 crore in the year-ago period, registering a year-on-year growth of 7.44 per cent.

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Provisions and contingencies rose to Rs 1,819 crore for the quarter ended December 2019 against Rs 1,677 crore in same period last year. Provision Coverage Ratio (PCR) stood at 67.42 per cent as on December 31, 2019.

On the asset quality front, gross NPA, as a percentage of gross advances, in Q3 FY20 declined to 14.86 per cent against 15.66 per cent in Q3 FY19. Net NPA ratio also fell at 6.99 per cent as on December 31, 2019 compared to 8.27 per cent in the year-ago period.

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Lender's global business grew by 8.5 per cent YoY to Rs 7,81,155 crore as on December 31, 2019. While total global deposits rose by 10.6 per cent YoY to Rs 4,45,091 crore, gross advances grew by 5.8 per cent YoY to Rs 3,36,064 crore.

Following Q3 earnings, Union Bank shares closed Monday's trade at Rs 50.95, up 4.19 per cent, on the Bombay Stock Exchange.

By Chitranjan Kumar