Union Bank of India Q4 net profit vaults 93 per cent to ₹2,782 cr

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Union Bank of India (UBI) posted a 93 per cent year-on-year (YoY) jump in Q4 (Q4FY23) net profit at Rs.2,782 crore on the back of healthy growth in net interest income and strong recovery from write-offs.

It was a public sector bank It posted a net profit of Rs. 1,440 crore in the year-ago quarter. Net profit in the reporting quarter increased by 24 per cent over the third quarter of the current year at Rs.2,245 crore.

The Bank’s Board of Directors has recommended a dividend of Rs 3 per share of US$ 10 for the financial year 23.

NIM jumps 22 pc

Net interest income (the difference between interest earned and interest disbursed) increased by 22% year-on-year to Rs.8,251 crore (Rs.6,769 crore in the year-ago quarter).

Non-interest income (which includes fee-based income, treasury income and recoveries on write-offs/WO) increased by 62% year-on-year to Rs.5,269 crore (Rs.3,243 crore). Within this, recovery in WO accounts increased 10 times to Rs. 2,954 crore (Rs. 294 crore).

Non-performing asset provisions (NPAs) increased by 13 per cent year-on-year to Rs. 3,567 crore (Rs. 3,154 crore).

The net interest margin improved to 2.98 percent in the fourth quarter of FY23, compared to 2.75 percent in the fourth quarter of FY22.

The placement of GNPAs has been improved To 7.53 percent of total advances at the end of March 2023, compared to 7.93 percent at the end of December 2022. The position of net advances also improved, to 1.7 percent of net advances, compared to 2.14 percent.

Total advances increased by 13 per cent year-on-year and stood at ₹8,09,905 crore as at the end of Mach-2022. Total deposits increased by 8 per cent and reached Rs.11,17,716 crore.

Manimkhalay, Managing Director and Chief Executive Officer, said the bank is looking at growth of 8-10 percent in deposits and 10-12 percent in advances in FY24.

It noted that the bank has a corporate loan sanction pipeline of Rs 35,000 crore. This includes penalties imposed on companies in sectors such as road projects, iron and steel, renewable energy and chemicals.

Putting private signal accounts (SMAs; these are accounts that show signs of initial stress) in the case of retail loans, Manimkhalai said, is a bit suspicious. But, she added, these loans are backed by an appropriate guarantee.

to collect money

The bank plans to raise Rs. 10,100 crore in FY24 via Equity (Rs. 8,000 crore), Additional Tier 1 Notes (Rs. 1,000 crore) and Tier 2 Notes (Rs. 1,100 crore).

The equity fundraising will serve two purposes – to mobilize capital to grow the business and to comply with SEBI regulations that require a publicly traded company to have at least 25 percent public equity.

public shareholding base

Manimkhalai said the bank has time until August 2024 to comply with the minimum public shareholding rule. At the end of March 2023, the shareholding of the government and the public in the bank was 83.49 percent and 6.57 percent, respectively.