Union Bank of India Q4 Net Profit Falls 78 Percent due to Bad Loans
Union Bank of India announced almost 78% net profit fall in the Q4, ended in March 2016. AS per their reports, it set separately more money to cover the risk of loan default and earned less interest and non-interest income.
Union Bank reported its net profit of Rs 96.12 Crore in Q4 while, they have earned net profit of Rs 443.77 Crore same on last year. Net interest income (NII) a bank earns by giving loans, fell 1.71% to Rs. 2,084.69 crore from Rs. 2,121.05 crore last year same quarter.
Union Bank got benefit from a tax write-back of Rs.251.18 crore, which saved it from posting a net loss. In the year-ago quarter, it paid Rs.198.58 crore in tax.
Bank’s Non-interest income fell 12.8% to Rs.996.39 crore from Rs. 1,143.07 crore in the same period in 2015. Gross NPA rose 85.49% to Rs. 24,170.89 crore at the end of the March quarter and The bank reported gross NPA of Rs. 18,495.16 in the previous quarter.
Provisions and possibilities rose 55% to Rs. 1,564.67 crore from Rs. 1,009.94 crore a year ago. In the December quarter, the bank reported Rs. 1,237.65 crore of provisions.
In December 2015, the Reserve Bank of India conducted an asset quality review across the banking sector, following which banks were asked to recognize visible stressed assets as non-performing assets (NPAs).
gross NPAs stood at 8.7% at the end of the March quarter as compared to 4.96% a year ago. Net NPAs stood at 5.25% as compared to 2.71% in the same quarter last year. On Friday, Union Bank of India shares closed at Rs.115.95 on the BSE.