 "Union Bank Q2 FY25 results: Net up 34.4% on non-interest income boost")
Public sector lender Union Bank of India’s (Union Bank) net profit during the second quarter of financial year 2024-25 (Q2 FY25) soared 34.43 per cent year-on-year (Y-o-Y) to Rs 4,720 crore, aided by a healthy rise in non-interest income.
Sequentially, the Mumbai-based lender’s net profit rose by 28.3 per cent from Rs 3,679 crore in June 2024 (Q1 FY25), according to a press statement filed with the stock exchange (BSE). Its stock closed 0.70 per cent lower at Rs 54.38 a share on BSE on Tuesday.
Its net interest income (NII) shrank by 0.87 per cent Y-o-Y to Rs 9,047 crore in Q2 FY25 compared to Rs 9,126 crore in the same quarter a year ago. Sequentially, NII declined by 3.88 per cent from Rs 9,412 crore in Q1 FY25. The net interest margin (NIM) shrank by 28 basis points (bps) to 2.90 per cent in Q2 FY25 compared to 3.18 per cent in Q2 FY24. Sequentially, NIM was down by 15 bps to 3.05 per cent in Q1 FY25.
Union Bank’s non-interest income rose by 44.19 per cent Y-o-Y to Rs 5,328 crore, the bank said. Reflecting pressures from stressed loans, the lender’s provisions for non-performing assets (NPAs) rose to Rs 2,504.42 crore in Q2 FY25 compared to Rs 1,691.41 crore in Q2 FY24. The credit costs rose to 1.09 per cent in Q2 FY25 from 0.81 per cent in Q2 FY24, the bank said in a statement.
Its gross Non-performing Assets (NPAs) declined to 4.36 per cent in September 2024 from 6.38 per cent in September 2023. Net NPAs also declined from 1.30 per cent in September 2023 to 0.98 per cent in September 2024. The provision coverage ratio (PCR), including written-off accounts, stood at 92.79 per cent in September 2024 compared to 92.03 per cent a year ago.
Its advances grew by 9.63 per cent Y-o-Y to Rs 9.28 trillion in Q2 FY25. Retail advances grew by 14.33 per cent Y-o-Y to Rs 1.92 trillion in September 2024.
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Total deposits increased by 9.17 per cent Y-o-Y to Rs 12.41 trillion. The share of low-cost deposits — current account and savings account (CASA) — in domestic operations declined to 32.72 per cent in September 2024 from 34.66 per cent a year ago.
The bank’s capital adequacy stood at 17.13 per cent, with Tier-1 at 15.23 per cent at the end of September 2024.