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Union Bank Q4 results: Profit after tax recorded at Rs 1,330 cr

For the full year, the standalone profit stood at Rs 2,906 crore as against a loss of Rs 6,613 crore in 2019-20, the bank said in a press release

twitter-logoPTI | June 7, 2021 | Updated 21:47 IST
Union Bank Q4 results: Profit after tax recorded at Rs 1,330 cr
The bank amalgamated Andhra Bank and Corporation Bank with it with effect from April 1, 2020

State-owned Union Bank of India on Monday reported a standalone profit after tax of Rs 1,330 crore in the quarter ended March 31, 2021, helped by improvement in asset quality.

The bank amalgamated Andhra Bank and Corporation Bank with it with effect from April 1, 2020.

The amalgamated entity had posted net loss of Rs 7,157 crore in the year-ago period, the lender said in its investor presentation.As per a BSE filing, the bank had posted a net loss of Rs 2,503.18 crore in the year-ago period. The bank said this number is related to its financials for pre-amalgamation period and hence not comparable with post-amalgamation financials for the quarter ended March 31, 2021.

For the full year, the standalone profit stood at Rs 2,906 crore as against a loss of Rs 6,613 crore in 2019-20, the bank said in a press release. According to the BSE filing, the bank's loss in 2019-20 was Rs 2,897.78 crore in the pre-amalgamation period.

"This was a turnaround year for the bank. Despite COVID and amalgamation, we posted a full year profit of Rs 2,906 crore. The asset quality is also under control and there is a substantial improvement on a year-on-year basis," lender's Managing Director and CEO Rajkiran Rai G told reporters.

Net interest income (NII) declined 9.46 per cent to Rs 5,403 crore in the quarter under review from Rs 5,967 crore.

Net interest margin (NIM) fell to 2.38 per cent from 2.89 per cent in the year-ago period.

Gross non-performing loans improved to 13.74 per cent from 14.59 per cent. Net NPA stood at 4.62 per cent as against 5.22 per cent.

Rai said he expects net NPA to be below 3 per cent during the current financial year.

Fresh slippages in the fourth quarter stood at Rs 14,688 crore.

The bank has set a recovery target of Rs 13,000 crore during 2021-22.

Rai said the bank identified 17 accounts worth Rs 7,800 crore to be transferred to the National Asset Reconstruction Company Ltd (NARCL) in the initial phase.

Provision coverage ratio improved to 81.27 per cent as on March 31, 2021 as against 78.21 per cent at March-end last year. Loan loss provisions declined 64.51 per cent to Rs 3,850 crore from Rs 10,847 crore.

Domestic advances declined by 1.20 per cent to Rs 6,37,672 crore from Rs 6,45,421 crore. The bank registered 10.49 per cent growth in retail, 11.89 per cent growth in agriculture, 3.24 per cent growth in MSME advances.

The lender is looking at 8-10 per cent credit growth in 2021-22, Rai said.

Speaking on amalgamation, he said, the bank had earlier estimated a total benefit of Rs 3,600 crore from synergies during the three-year period. In the first year itself it is looking at a synergy realisation of Rs 1,240 crore.

As part of rationalisation, the bank is looking to close 750 bank branches and, of that, 400 branches have already been identified, he added.

The bank's scrip closed at Rs 35.60 on the BSE on Monday.

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