Union Bank Q1 Results: Profit rises over 27% to Rs 5,641 crore
Mumbai, State-owned Union Bank of India on Wednesday reported a 27.5 per cent jump in its consolidated net profit to Rs 5,641.52 crore for the
Mumbai, State-owned Union Bank of India on Wednesday reported a 27.5 per cent jump in its consolidated net profit to Rs 5,641.52 crore for the June quarter of the current fiscal on the back of better margins, improved asset quality and higher interest income.In the year-ago period, the bank's net profit stood at Rs 4,427.94 crore, as per a regulatory filing.The bank's net interest income (NII) edged up by 1.05 per cent year-on-year to Rs 27,203 crore in the reporting quarter, from Rs 26,919 crore, limited by the net interest margin (NIM).The NIM marginally advanced by 0.04 per cent year-on-year and 0.16 per cent on a sequential basis to 2.80 per cent in Q1FY27.Asheesh Pandey, MD and CEO of Union Bank of India, expressed confidence that margins can be improved further despite the evolving interest-rate environment.Under the special FCNR-B window introduced by the Reserve Bank of India (RBI), Pandey expects around 1.5-2 billion inflows by September.
He added that the bank has so far garnered USD 106 million in deposits."We have mobilised around USD 106 million under FCNR-B deposits so far. Our target is to raise USD 1.5-2 billion by September," Pandey said during the post-earnings conference.He added that deposits have been garnered from several locations, including Australia and the UAE."Deposits have come from several locations, including Australia and the UAE. We have five dedicated NRI branches and have identified another 20 branches with a large NRI customer base to run a focused mobilisation campaign. We have also set up an NRI cell to contact customers individually instead of relying only on SMS campaigns," he said.The bank is currently offering interest rates of around 6.10-6.60 per cent and is comfortable with these rates, Pandey said."Initially, customers needed time to understand the scheme.
Subsequently, the RBI FAQs clarified many queries. FCNR-B mobilisation also requires direct engagement with NRIs, who compare deposit rates before investing."The current response has been encouraging, and there is a healthy pipeline," Pandey said.The central bank introduced the special FCNR-B window during the June monetary policy committee (MPC) meeting, including bearing the cost of currency hedging, to increase foreign capital inflows and bolster India's external position.In the quarter under review, global deposits of the bank rose by 3.50 per cent to Rs 12.83 lakh crore, compared to Rs 12.39 lakh crore in the year-ago period. Domestic deposits increased by 3.49 per cent to 12.83 lakh crore in Q1FY27.The low-cost, current account and savings account (CASA) deposits increased 11.73 per cent YoY to 4.50 lakh crore.CASA ratio improved to 35.09 per cent in the reporting quarter, from 32.51 per cent in Q1FY26.Gross advances of the bank also rose 12.50 per cent YoY to Rs 10.96 lakh crore in Q1FY27, from Rs 9.74 lakh crore in the corresponding period a year ago.
The BriefWire