Union Bank of India reported a 56.94% growth in net profit for the quarter ended September 2012 at Rs554 crore as against Rs353 crore posted in the year-ago period, mainly on account of lower provisioning and low base effect.
Provisions were down to Rs719 crore in the second quarter of the current fiscal from Rs852 crore a year ago. The bank provided Rs354 crore against non-performing assets (NPAs) in quarter ended September 2012 compared to Rs495 crore in the same period last fiscal.
The bank’s net interest income grew 11.38% and non-interest income grew 9% as compared to last fiscal.
Its net interest margins (NIMs), a measure of lending profitability, were at 3.02%, lower than 3.21% last year. The bank aims to maintain NIMs around 3% for rest of the year.
Union Bank witnessed credit growth of 20% and deposit growth of 15.6% in Q2. The bank has lowered its annual credit growth target for this fiscal.
“We should be able to achieve 17% credit growth and 15% deposit growth by the end of this financial year,” D Sarkar, chairman and managing director, said. Earlier, the bank had set credit growth target of 18% for the current fiscal.
On the asset quality front, the gross NPA ratio rose to 3.66% from 3.49% last year and net NPA ratio increased to 2.06% from 2.04% in the year-ago period.
The bank restructured Rs839 crore worth of loans in the July-September 2012 period.