Union Bank of India reports 13.7% Profit Surge in Q1 FY24

22 Jul 2024 , 09:25 AM

Union Bank of India reported a robust financial performance for the first quarter ending June 30, 2024. The bank’s net profit surged by 13.7% year-on-year, reaching ₹3,678.9 Crore compared to ₹3,236.4 Crore in the same period last year. This increase highlights the bank’s strong financial health and operational efficiency.

The net interest income (NII) of Union Bank of India saw a notable growth of 6.5%, climbing to ₹9,412.1 Crore from ₹8,839.7 Crore year-on-year. This rise in NII reflects the bank’s ability to enhance its revenue from core banking activities.

The bank’s asset quality improved, with the gross non-performing assets (GNPA) ratio decreasing to 4.54% from 4.76% in the previous quarter. Similarly, the net non-performing assets (Net NPA) ratio improved to 0.90% from 1.03% quarter-on-quarter. In terms of absolute numbers, GNPA reduced to ₹41,422.9 Crore from ₹43,097.7 Crore, and Net NPA fell to ₹7,902 Crore from ₹8,989.9 Crore.

At the time of writing on July 22, 2024 at 9:23 am, shares of Union Bank of India is  currently trading at ₹136 which is a 0.28% gain than the previous close. Union Bank of India stock has gained a total of 53% in the last one year, and witnessed a 12% gain since the beginning of the year.

Provisions for bad loans increased significantly to ₹2,755.8 Crore from ₹1,259.6 Crore in the previous quarter and ₹2,005 Crore year-on-year. This rise in provisions indicates the bank’s proactive approach to managing potential loan losses.

The bank’s total domestic deposits grew by 8.52% year-on-year, reaching ₹12,24,191 Crore as of June 30, 2024. Total business for the bank expanded by 9.76% year-on-year, driven by an 11.46% increase in gross advances and an 8.52% rise in total deposits.

The Retail, Agriculture, and MSME (RAM) segments showed impressive growth, with RAM advances rising by 14.53% year-on-year. Specifically, retail advances grew by 12.28%, agriculture advances by 23.00%, and MSME advances by 7.21%. RAM advances accounted for 57.83% of domestic advances.

Union Bank of India’s Capital to Risk Weighted Assets Ratio (CRAR) improved to 17.02% from 15.95% as of June 30, 2023. The Common Equity Tier 1 (CET1) ratio also increased to 13.81% from 12.34% year-on-year. The bank reported a Return on Assets (ROA) of 1.06% and a Return on Equity (ROE) of 15.70% for the first quarter of FY25.

Headquartered in Mumbai, Union Bank of India is a major public sector bank with a vast network of over 8,700 branches and more than 10,000 ATMs across India. Following its merger with Corporation Bank and Andhra Bank on April 1, 2020, Union Bank became one of the largest PSU banks in terms of branch network.

The bank also has international operations with branches in Hong Kong, Dubai, Antwerp, and Sydney, and representative offices in Shanghai, Beijing, and Abu Dhabi. Established on November 11, 1919, Union Bank of India continues to be a significant player in the Indian banking sector.