Union Bank's net slips 22% on bad loan provision
Provisions for substandard loans rose to 15% from 10% a year ago. The bank has lowered its growth targets for the fiscal.
By ET Bureau | Updated:
MUMBAI: Union Bank reported 22% a YoY fall in net profit for April-June due to a rise in provisions for bad loans. Net profit was down at 464 crore from 601 crore a year ago.
The RBI's new accounting policy that requires lenders to make additional provisions on various categories of bad loans led to a rise in provisioning, said CMD MV Nair. The revised norms led to a rise of 214 crore in provisions on NPAs and restructured loans.
Provisions for substandard loans rose to 15% from 10% a year ago. The bank has lowered its growth targets for the fiscal. The revised credit growth target is 19%, while deposit growth target is 17%. Net interest margin was at 3.10% in April-June compared with 3.03% a year ago. It is targeting a NIM of 3.20% by end of the fiscal. Net interest income was up 8% at 1,590 crore.
The RBI's new accounting policy that requires lenders to make additional provisions on various categories of bad loans led to a rise in provisioning, said CMD MV Nair. The revised norms led to a rise of 214 crore in provisions on NPAs and restructured loans.
Provisions for substandard loans rose to 15% from 10% a year ago. The bank has lowered its growth targets for the fiscal. The revised credit growth target is 19%, while deposit growth target is 17%. Net interest margin was at 3.10% in April-June compared with 3.03% a year ago. It is targeting a NIM of 3.20% by end of the fiscal. Net interest income was up 8% at 1,590 crore.
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