Union Bank of India, a public sector bank, has reported a whopping 93% year-on-year increase in its net profit for Q4FY23 at ₹2,782 crore, driven by healthy growth in net interest income and a robust recovery from written-off accounts. The bank had reported a net profit of ₹1,440 crore in the same period last year.
The net interest income (NIM) of the bank increased by 22% YoY to ₹8,251 crore, while the non-interest income (comprising fee-based income, treasury income, and recovery in written-off/WO accounts) rose by 62% YoY to ₹5,269 crore. Within the non-interest income, recovery in WO accounts increased by ten times to ₹2,954 crore.
The gross non-performing assets (GNPAs) position of the bank improved to 7.53% of gross advances as of March-end 2023 against 7.93% as of December-end 2022. The net NPAs position also improved to 1.7% of net advances against 2.14%. The bank's Board has recommended a dividend of ₹3 per equity share of ₹10 each for FY23.
The MD & CEO of Union Bank of India, A Manimekhalai, stated that the bank is aiming for an 8-10% growth in deposits and a 10-12% growth in advances in FY24. The bank has a corporate loan sanctions pipeline of ₹35,000 crore, comprising sanctions to companies in sectors such as road projects, iron & steel, renewable energy, and chemicals.
To comply with SEBI regulations that require a publicly listed company to have a minimum of 25% public shareholding, the bank is planning to raise ₹10,100 crore in FY24 via equity (₹8,000 crore), additional tier-1 bonds (₹1,000 crore), and tier-2 bonds (₹1,100 crore). Manimekhalai said the bank has time up to August 2024 to comply with the minimum public shareholding norm. As of March-end 2023, the shareholding of the government and public in the bank was at 83.49% and 6.57%, respectively.
In conclusion, Union Bank of India has seen remarkable growth in its net profit, net interest income, and recovery from written-off accounts in Q4FY23. With an eye on further growth, the bank plans to raise funds to comply with SEBI regulations while aiming for a healthy growth rate in deposits and advances in the upcoming financial year.