Union Bank of India, a state-owned financial institution, reported a 13.7 per cent year-on-year (YoY) increase in net profit for Q1 FY25, with the profit after tax (PAT) reaching ₹3,678.9 crore. This marks a significant rise from ₹3,236.4 crore in the corresponding quarter of the previous fiscal year, as stated in the bank’s regulatory filing.
The bank’s net interest income (NII) saw a 6.5 per cent growth, amounting to ₹9,412.1 crore compared to ₹8,839.7 crore in Q1 FY24. This increase in NII reflects the bank’s effective management of its lending activities and interest paid to depositors.
Union Bank of India also reported improvements in its asset quality. The gross non-performing asset (GNPA) ratio decreased to 4.54 per cent in the June quarter from 4.76 per cent in the March quarter. Similarly, the net NPA ratio dropped to 0.90 per cent from 1.03 per cent quarter-on-quarter. In monetary terms, the gross NPA stood at ₹41,422.9 crore, while the net NPA was ₹7,902 crore.
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Provisions for the quarter were significantly higher at ₹2,755.8 crore, compared to ₹1,259.6 crore in the previous quarter and ₹2,005 crore year-on-year.
The bank’s domestic deposits experienced an 8.52 per cent YoY increase, bringing the total deposit base to ₹12,24,191 crore as of June 30, 2024. The total business of the bank grew by 9.76 per cent YoY, with gross advances increasing by 11.46 per cent and total deposits by 8.52 per cent, culminating in a total business volume of ₹21,36,405 crore.
The RAM (Retail, Agriculture, and MSME) segment showed robust growth, increasing by 14.53 per cent YoY. This includes a 12.28 per cent growth in retail advances, a 23.00 per cent growth in agricultural advances, and a 7.21 per cent growth in MSME advances. The RAM segment now constitutes 57.83 per cent of the bank’s domestic advances.
The bank’s capital adequacy ratio (CRAR) improved from 15.95 per cent in the previous year to 17.02 per cent as of June 30, 2024. Additionally, the CET1 ratio increased to 13.81 per cent from 12.34 per cent YoY. Return on Assets (RoA) and Return on Equity (RoE) stood at 1.06 per cent and 15.70 per cent respectively for Q1 FY25.
Despite the positive results, Union Bank of India’s shares closed slightly lower, ending at ₹135.60, down by ₹0.65 or 0.48 per cent on the BSE. The results were announced after market hours.
