Union Bank reports 15% rise in Q3 net profit

Union BankUnion Bank on Friday reported a year-on-year rise of 15.39 per cent in its third quarter net profit to Rs 348.9 crore, thanks to higher growth in retail, agriculture and MSME sectors.

The public sector lender's net interest income jumped 3.81 per cent to Rs 1,963 crore in the October-December quarter of 2013, from Rs 1,891 crore in the corresponding quarter of the previous year.

Domestic advances increased 18 per cent from Rs 178,039 crore to Rs 210,496 crore; while overseas advances grew 20 per cent, from Rs 189,997 crore to Rs 227,745 crore.

Arun Tiwari, the bank's newly-appointed CMD, said, "Retail, MSME and agriculture were the main contributers to the growth. We will continue to focus on these three segments."

Domestic net interest margins (NIM), however, slipped from 30.3 per cent to 2.54 per cent; while global NIM tumbled from 2.95 per cent to 2.50 per cent. Mr. Tiwari said NIM was not expected to fall below 2.6 per cent, adding that it could jump to 2.75 per cent by March.

Provision coverage ratio for the third quarter was reported at 60 per cent, as against 66 per cent in the year-ago period. Under Basel III, the lender's capital adequacy ratio stood at 10.12 per cent.

The government-run lender raised Rs 2,000 crore via issuance of Tier II bonds in the three-month period under review.