Union Bank of India

20 Oct 2022 , 05:51 PM

Union Bank of India has reported 21% growth in net profit at Rs 1847.70 crore for the quarter ended September 2022 (Q2FY2023). The bank has posted healthy 22% growth in net interest income (NII), while the core fee income of the bank also improved 30% in Q2FY2023. The Net Interest Margin (NIM) of the bank improved to 3.15% in Q2FY2023 compared to 2.95% in the corresponding quarter of previous year. On business front, the bank as has posted 17% growth in business with strong 22% surge in loan book. The asset quality of the bank has improved with the dip in NPAs in Q2FY2023. Bank has substantially improved the credit to deposit ratio to 74.2% at end September 2022 from 69.4% at end September 2021. However, the CASA ratio of the bank has declined to 35.6% at end September 2022 from 37.2% at end September 2021. Asset quality improves: The bank has exhibited substantial improvement in the asset quality with the decline in fresh slippages of loans in Q2FY2023. The fresh slippages of loans stood at Rs 2913 crore in Q2FY2023 compared with 4244 crore in previous quarter and Rs 6745 crore in the corresponding quarter last year. The recoveries of NPAs stood at Rs 2160 crore, upgradations at Rs 1263 crore and the write-off of loans was at Rs 8599 crore in Q2FY2023. NPA reduction together was substantially higher at Rs 12022 crore against fresh slippages of  loans at Rs 2913 crore for Q2FY2023. Retail loans contributed fresh slippages of Rs 439 crore, agriculture Rs 1029 crore, MSME Rs 914 crore and large corporate Rs 531 crore in Q2FY2023. Segment wise NPA ratio of retail loans stood at 3.20%, agriculture 11.19%, MSME 15.93% and large corporate 7.45% end September 2022. SMA 2 category loan book of the bank has declined to 0.14% end September 2022. The standard restructured loan book of the bank declined to Rs 20144 crore end September 2022. Provision coverage ratio further improved to 86.61% at end September 2022 compared to 84.75% a quarter ago and 81.77% a year ago. The capital adequacy ratio of the bank stood at 14.5% with Tier I ratio at 12.3% at end September 2022.

Asset Quality Indicators: Union Bank of India
	Sep-22	Jun-22	Mar-22	Dec-21	Sep-21	Variation
QoQ	YTD	YoY
Gross NPA (Rs Crore)	65390.85	74500.00	79587.07	77786.12	80211.73	-12	-18	-18
Net NPA (Rs Crore)	19192.63	22391.95	24303.30	25257.32	26786.42	-14	-21	-28
% Gross NPA	8.45	10.22	11.11	11.62	12.64	-177	-266	-419
% Net NPA	2.64	3.31	3.68	4.09	4.61	-67	-104	-197
% PCR	86.61	84.75	83.61	82.80	81.77	186	300	484
% CRAR – Basel III	14.50	14.42	14.52	13.92	13.64	8	-2	86
% CRAR – Tier I – Basel III	12.26	12.14	12.19	11.75	11.32	12	7	94
Variation in basis points for figures given in percentages and in % for figures in Rs crore

  Business Highlights: Strong business growth: The business of the bank has increased 17% YoY to Rs 1816955 crore end September 2022, driven by 22% surge in advances to Rs 773690 crore. Deposits rose 14% to Rs 1043265 crore at end September 2022. CASA deposits ratio declines: The CASA deposits of the bank rose 9% YoY to Rs 371697 crore at end September 2022. The CASA ratio eased to 35.6% at end September 2022 compared to 37.2% at end September 2021, while eased from 36.2% a quarter ago. Strong loan growth: Advances growth was driven by retail loans rising 14% YoY to Rs 146715 crore at end September 2022, while credit to agriculture increased 15% to Rs 143874 crore and MSME 13% to Rs 120069 crore at end September 2022. The corporate credit has surged 32% to Rs 341811 crore end September 2022. Investment book of the bank rose 4% YoY to Rs 347175 crore at end September 2022. The AFS book dipped -8% to Rs 74209 crore, while HTM book rose 8% to Rs 272966 crore at end September 2022. The duration of the overall investment portfolio stood at 1.14 years end September 2022 compared with 1.27 years at end September 2021. Margins improve: The bank has showed sharp 12 bps YoY rise in cost of deposits to 3.74%, while yield on advances jumped 53 bps YoY to 7.65% in Q2FY2023. Thus, the NIM has improved 20 bps YoY to 3.15% in Q2FY2023. Branch expansion: The bank has network of 8729 branches and 11092 ATM`s end September 2022. Book value of the bank stood at Rs 101.5 per share at end September 2022, while the adjusted book value (net of NNPA and 25% of restructured advances) was Rs 66.0 per share at end September 2022. Quarterly Performance NII rises as NIM improves: Bank has recorded 18% increase in the interest earned at Rs 19681.70 crore, while interest expenses increased 15% to Rs 11376.69 crore in Q2FY2023. NII improved 22% to Rs 8305.01 crore in the quarter ended September 2022. Healthy growth in the core fee income: Bank has posted strong 30% growth in core fee income to Rs 1602 crore. However, the recoveries dipped -43% to Rs 1003 crore and forex income -26% to Rs 138 crore. Further, the treasury income declined -63% to Rs 295 crore, causing -18% dip in the overall non-interest income to Rs 3276.25 crore in the quarter ended September 2022. Expenses ratio improves: The operating expenses of the bank increased 6% to Rs 5004.17 crore, as other expenses moved up 8% to Rs 2257.99 crore, while employee expenses rose 4% to Rs 2746.18 crore in Q2FY2023. Cost to income ratio improved to 43.2% in Q2FY2023 compared with 43.8% in Q2FY2022, helping the Operating Profit to increase 8% to Rs 6577.09 crore. Provisions and contingencies rises: The bank has showed 9% rise in provisions to Rs 4076.81 crore. The loan loss provisions declined -24% to Rs 2816 crore, while bank has written back investment provisions of Rs 113 crore and other provisions of Rs 94 crore. However, standard asset provisions zoomed 3162% to Rs 1468 crore Effective tax rate declined to 26.1% in Q2FY2023 from 35.1% in Q2FY2022. Net Profit surged 21% YoY to Rs 1847.70 crore during quarter ended September 2022. Financial Performance H1FY2023: Bank has posted 26% increase in net profit to Rs 3406.16 crore in the half year ended September 2022 (H1FY2023). The net interest income increased 15% to Rs 15886.71 crore, while non-interest income declined -10% to Rs 6093.10 crore. Net total income rose 7% to Rs 21979.81 crore in H1FY2023. The operating expenses increased 7% to Rs 9955.16 crore, while provision and contingencies rose 3% to Rs 7357.95 crore, allowing profit before tax to increase 13% to Rs 4666.70 crore in H1FY2023. The cost-to-income ratio improved to 45.3% in H1FY2023 compared to 45.4% in H1FY2022. An effective tax rate declined to 27.0% in H1FY2023 compared to 34.4% in H1FY2022. The net profit has increased 26% to Rs 3406.16 crore in H1FY2023.

Union Bank of India: Results
Particulars	2209 (3)	2109 (3)	Var %	2209 (6)	2109 (6)	Var %	2203 (12)	2103 (12)	Var %
Interest Earned	19681.70	16705.71	18	37855.94	33839.94	12	67943.95	68767.34	-1
Interest Expended	11376.69	9876.44	15	21969.23	19997.22	10	40157.49	44078.91	-9
Net Interest Income	8305.01	6829.27	22	15886.71	13842.72	15	27786.46	24688.43	13
Other Income	3276.25	3978.24	-18	6093.10	6757.65	-10	12524.82	11744.49	7
Net Total Income	11581.26	10807.51	7	21979.81	20600.37	7	40311.28	36432.92	11
Operating Expenses	5004.17	4733.98	6	9955.16	9345.49	7	18438.07	16765.99	10
Operating Profits	6577.09	6073.53	8	12024.65	11254.88	7	21873.21	19666.93	11
Provisions & Contingencies	4076.81	3723.75	9	7357.95	7126.10	3	13293.80	17267.51	-23
Profit Before Tax	2500.28	2349.78	6	4666.70	4128.78	13	8579.41	2399.42	258
Provision for tax	652.58	823.66	-21	1260.54	1421.68	-11	3347.31	-506.55	-761
PAT	1847.70	1526.12	21	3406.16	2707.10	26	5232.10	2905.97	80
EPS*(Rs)	10.8	8.9		10.0	7.9		7.7	4.3
Adj BV (Rs)	66.0	50.9		66.0	50.9		52.9	46.1
* Annualized on current equity of Rs 6834.75 crore. Face Value: Rs 10, Figures in Rs crore
Source: Capitaline Corporate Database

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