Union Bank of India stock surges 4.5% after Q1 profit more than doubles to Rs 3,236 cr

Shares of Union Bank of India surged over 4 per cent on July 21 after reporting solid Q1 numbers yesterday. At 1.45 pm, the Union Bank stock was trading 4.42 per cent higher at Rs 90.79 on BSE. 

The public lender on Thursday reported that its standalone profit has surged 107 per cent to Rs 3,236 crore on a standalone basis, compared to Rs 1,558.5 crore in the corresponding period last year. 

The profit after tax has almost doubled in the June quarter driven by a higher core income and significantly lower provisions reported by the state-owned lender. 

The gross non-performing assets (GNPA) stood at 7.34 per cent in the June quarter against 7.53 per cent in the March quarter. Net NPA came at 1.58 per cent against 1.70 per cent quarter-on-quarter. 

In absolute terms, gross NPA stood at Rs 60,104 crore, down 19.32 per cent on-year, and net NPA stood at Rs 12,138 crore, down 45.79 percent, as per the exchange filing. 

Total income in the first quarter of the current fiscal rose to Rs 27,381 crore from Rs 20,991 crore in the same period a year ago, Union Bank of India said in a regulatory filing. 

Interest earned by the bank improved to Rs 23,478 crore over Rs 18,174 crore in June 2022. 

Net interest income (NII), which is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, increased 16.6 per cent, coming at Rs 8,839.7 crore against Rs 7,581.7 crore in the corresponding quarter of FY23. 

Results at glance 

Interest Income 

Q1FY23  

18,174 

Q4FY23  

22,005 

Q1FY24 

23,478   

YoY%  

29.18 

QoQ% 

6.70 

Interest Expenses  

Q1FY23  

10,593  

Q4FY23  

13,754  

Q1FY24 

14,638  

YoY%  

38.19 

QoQ% 

6.43 

Net Interest Income  

Q1FY23  

7,582 

Q4FY23  

8,251 

Q1FY24 

 8,840 

YoY%  

16.59 

QoQ% 

7.14 

Non-Interest Income  

Q1FY23  

2,817 

Q4FY23  

5,269 

Q1FY24 

 3,903 

YoY%  

38.57 

QoQ% 

-25.92 

NIM %  

Q1FY23  

3.00% 

Q4FY23  

2.98% 

Q1FY24 

3.13%  

YoY%  

13 bps 

QoQ% 

15 bps 

Operating Profit  

Q1FY23  

5,448 

Q4FY23  

6,823 

Q1FY24 

 7,179 

YoY%  

31.79 

QoQ% 

5.22 

Profit After Tax  

Q1FY23  

1,558 

Q4FY23  

2,782 

Q1FY24 

 3,236 

YoY%  

107.67 

QoQ% 

16.00 

(In Rs Crores) 

Advances and Deposit 

The global and domestic advances of the state-owned lender increased 12.33 per cent and 11.77 per cent on-year, respectively in June quarter. According to the press release, global advances stood at Rs 8.19 lakh crore and domestic advances stood at 7.94 lakh crore in April-June. 

Deposits  

However, retail term deposit less than Rs 2 crore fell 0.58 per cent on-year to Rs 4.36 lakh crore. On sequential basis, it fell 0.43 per cent. 

Union Bank FD rates

The state-owned lender revised the interest rates of its fixed deposits (FDs) for amounts less than Rs 2 crore in May 2023. Union Bank of India is offering an interest rate of 3 per cent on fixed deposits maturing between seven to 45 days. 

The interest rate offered for FDs maturing between 46 days to 90 days, is now offering 4.05 per cent. The fixed deposits maturing between 91 days to 180 days, will fetch an interest of 4.30 per cent. For FDs with a tenure of 181 Days to less than 1 year will get an interest rate of 5.35 per cent.

The bank is offering an interest rate of 6.30 per cent for fixed deposits maturing between one year to 398 days. The bank is offering 7 per cent on tenure of 399 days. For FDs ranging from 400 Days to less than 3 years, the interest rate will be 6.30 per cent.

The fixed deposits with a tenure of 3 years, will now fetch an interest rate of 6.50 per cent and 6.70% on tenures ranging from 3 years to 10 years.

Senior citizen deposits will earn 0.50 per cent over and above the normal rates displayed above. The highest interest rate offered to senior citizens is 7.50 per cent on tenure of 399 days.

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