Union Bank of India has reported 14% growth in net profit at Rs 3678.85 crore for the quarter ended June 2024 (Q1FY2025). The bank has posted healthy 6% growth in net interest income (NII), while the core fee income of the bank improved 34% in Q1FY2025. The Net Interest Margin (NIM) of the bank eased to 3.05% in Q1FY2025 compared to 3.13% in the corresponding quarter of previous year.

On business front, the bank as has posted 10% growth in business with 11% increase in loan book. The asset quality of the bank has continued to improve in Q1FY2025. The credit to deposit ratio increased to 74.5% at end June 2024 from 72.6% at end June 2023. However, the CASA ratio of the bank has declined to 32.6% at end June 2024 from 34.1% at end June 2023.

Asset quality improves: The bank has continued to improve asset quality in Q1FY2025.

The fresh slippages of loans stood at Rs 2318 crore in Q1FY2025 compared with 3323 crore in previous quarter and Rs 3241 crore in the corresponding quarter last year.

The recoveries of NPAs stood at Rs 1200 crore, upgradations at Rs 607 crore and the write-off of loans was at Rs 2186 crore in Q1FY2025.

The standard restructured loan book of the bank stood at Rs 11863 crore end June 2024.

Provision coverage ratio improved to 93.49% at end June 2024 compared to 92.69% a quarter ago and 90.86% a year ago.

The capital adequacy ratio of the bank stood at 17.0% with Tier I ratio at 15.1% at end June 2024.

The risk weighted assets of the bank has increased 14% YoY to Rs 672376 crore end June 2024,

Asset Quality Indicators: Union Bank of India
'	Jun/24	Mar/24	Dec/23	Sep/23	Jun/23	Variation
						QoQ	YoY
Gross NPA (Rs Crore)	41422.94	43097.73	43261.88	54012.26	60103.72	-4	-31
Net NPA (Rs Crore)	7902.04	8989.92	9351.23	10421.01	12137.89	-12	-35
% Gross NPA	4.54	4.76	4.83	6.38	7.34	-22	-280
% Net NPA	0.90	1.03	1.08	1.30	1.58	-13	-68
% PCR	93.49	92.69	92.54	92.03	90.86	80	263
% CRAR - Basel III	17.02	16.97	15.03	16.69	15.95	5	107
% CRAR - Tier I - Basel III	15.14	14.99	13.06	14.57	13.86	15	128
Variation in basis points for figures given in percentages and in % for figures in Rs crore

'

Business Highlights:

Steady business growth: The business of the bank has increased 10% YoY to Rs 2136405 crore end June 2024, driven by 11% rise in advances to Rs 912214 crore. Deposits rose 9% to Rs 1224191 crore at end June 2024.

CASA deposits ratio declines: The CASA deposits of the bank increased 4% YoY to Rs 399480 crore at end June 2024. The current account deposits were flat at Rs 66941 crore, while saving account deposits increased 5% to Rs 332539 crore end June 2024. The CASA ratio declined to 32.6% at end June 2024 compared to 34.1% at end June 2023, while declined from 33.6% a quarter ago.

The term deposits have increased 11% to Rs 824711 crore end June 2024. Overseas deposits have increased 85% to Rs 28023 crore end June 2024.

Double digit loan growth: Advances growth was driven by retail loans rising 12% YoY to Rs 182316 crore at end June 2024, while credit to agriculture increased 23% to Rs 188939 crore and MSME 7% to Rs 136951 crore at end June 2024. The corporate credit has improved 8% to Rs 404008 crore end June 2024. The overseas credit has jumped 34% to Rs 33417 crore end June 2024.

Investment book of the bank rose 1% YoY to Rs 346202 crore at end June 2024. The SLR book was flat at Rs 273987 crore, while non SLR book declined 5% to Rs 72215 crore at end June 2024. The AFS book dipped 70% to Rs 24331 crore, while HTM book rose 20% to Rs 321871 crore at end June 2024. The duration of the AFS investment portfolio stood at 2.41 years end June 2024 compared with 1.19 years at end June 2023.

Margins ease: The bank has showed 40 bps YoY jump in cost of deposits to 5.37%, while yield on advances increased 29 bps YoY to 8.72% in Q1FY2025. Thus, the NIM has declined 8 bps YoY to 3.05%, while fell 4 bps qoq to 3.05%.

Branch expansion: The bank has added 7 branches and 360 ATMs in Q1FY2025, taking overall tally to 8473 branches and 9342 ATM`s end June 2024.

Book value of the bank stood at Rs 126.7 per share at end June 2024, while the adjusted book value (net of NNPA and 25% of restructured advances) was Rs 112.5 per share at end June 2024.

Quarterly Performance

NII growth ease as NIM declines: Bank has recorded 12% increase in the interest earned at Rs 26364.39 crore, while interest expenses increased 16% to Rs 16952.30 crore in Q1FY2025. NII improved 6% to Rs 9412.09 crore in the quarter ended June 2024.

Healthy growth in the core fee income: Bank has posted strong 34% growth in core fee income to Rs 2868 crore, while the recoveries and jumped 38% to Rs 954 crore. However, the treasury income declined 24% to Rs 413 crore, forex income dipped 25% to Rs 197 crore and other income fell 72% to Rs 77 crore. The overall non-interest income increased 16% to Rs 4509.23 crore in the quarter ended June 2024.

Expenses ratio rises: The operating expenses of the bank increased 10% to Rs 6136.01 crore, as other expenses moved up 8% to Rs 2567.98 crore, while employee expenses increased 12% to Rs 3568.03 crore in Q1FY2025. Cost to income ratio was nearly stable at 44.1% in Q1FY2025 compared with 43.7% in Q1FY2024. The Operating Profit increased 8% to Rs 7785.31 crore.

Provisions and contingencies jumps on surge in standard asset provisions: The bank has showed 37% jumps in provisions to Rs 2755.81 crore, as standard asset provisions surged 2214% to Rs 1296 crore and other provisions increased 50% to Rs 108 crore. However, the loan loss provisions declined 17% to Rs 1651 crore, while the bank has written back investment provisions of Rs 300 crore,

Effective tax rate declined to 26.9% in Q1FY2025 from 37.5% in Q1FY2024. Net Profit rose by 14% YoY to Rs 3678.85 crore during quarter ended June 2024.

Financial Performance FY2024:

Bank has posted 62% increase in net profit to Rs 13648.31 crore in the year ended March 2024 (FY2024). The net interest income increased 12% to Rs 36570.40 crore, while non-interest income moved up 10% to Rs 16080.19 crore, pushing up net total income by 11% to Rs 52650.59 crore in FY2024. The operating expenses increased 11% to Rs 24439.96 crore, while provision and contingencies dipped 49% to Rs 6780.24 crore, allowing profit before tax to increase 77% to Rs 21430.39 crore in FY2024. The cost-to-income ratio was steady at 46.4% in FY2024 compared to 46.3% in FY2023. An effective tax rate rose to 36.3% in FY2024 compared to 30.5% in FY2023. The net profit has increased 62% to Rs 13648.31 crore in FY2024.

Union Bank of India: Results
Particulars	2406 (3)	2306 (3)	Var %	2403 (12)	2303 (12)	Var %
Interest Earned	26364.39	23477.93	12	99777.96	80743.34	24
Interest Expended	16952.30	14638.23	16	63207.56	47978.00	32
Net Interest Income	9412.09	8839.70	6	36570.40	32765.34	12
Other Income	4509.23	3903.32	16	16080.19	14633.15	10
Net Total Income	13921.32	12743.02	9	52650.59	47398.49	11
Operating Expenses	6136.01	5563.70	10	24439.96	21931.33	11
Operating Profits	7785.31	7179.32	8	28210.63	25467.16	11
Provisions & Contingencies	2755.81	2005.03	37	6780.24	13329.44	-49
Profit Before Tax	5029.50	5174.29	-3	21430.39	12137.72	77
EO	0.00	0.00	-	0.00	0.00	-
PBT after EO	5029.50	5174.29	-3	21430.39	12137.72	77
Provision for tax	1350.65	1937.85	-30	7782.08	3704.45	110
PAT	3678.85	3236.44	14	13648.31	8433.27	62
EPS*(Rs)	19.28	16.96	'	17.88	11.05	'
Adj BV (Rs)	112.47	86.33	'	103.48	80.20	'
* Annualized on current equity of Rs 7633.61 crore. Face Value: Rs 10, Figures in Rs crore
Source: Capitaline Corporate Database

'

Powered by Capital Market - Live News