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Union Bank of India posts Q3 net loss amid higher provisions

Union Bank of India posted a fiscal third-quarter net loss amid an increase in provisions and contingencies.

The lender on Feb. 3 posted a net loss of 12.50 billion rupees for the quarter ended Dec. 31, 2017, against a net profit of 1.04 billion rupees in the year-ago quarter. The bank's loss per share came in at 16.63 rupees, compared with an EPS of 1.51 rupees.

Provisions and contingencies for the quarter surged year over year to 32.54 billion rupees from 16.70 billion rupees. Excluding provisions and contingencies, total expenditure declined year over year to 74.79 billion rupees from 77.38 billion rupees.

Interest earned rose to 82.60 billion rupees from 82.50 billion rupees, while total income dropped to 91.34 billion rupees from 95.89 billion rupees. Operating profit before provisions and contingencies decreased to 16.55 billion rupees from 18.51 billion rupees.

For the nine-month period ended Dec. 31, 2017, Union Bank of India posted a net loss of 26.64 billion rupees, against a net profit of 4.47 billion rupees in the prior-year period. Its loss per share was 37.15 rupees, compared with an EPS of 6.50 rupees.

The bank's gross nonperforming assets ratio clocked in at 13.03% as of Dec. 31, 2017, up from 12.35% as of Sept. 30, 2017, and from 11.70% as of Dec. 31, 2016. The net NPA ratio at the end of the quarter stood at 6.96%, up from 6.70% a quarter earlier and from 6.95% a year earlier.

As of Dec. 31, 2017, the lender's capital adequacy ratio under Basel III was 11.37%, compared with 11.22% as of Sept. 30, 2017, and 11.36% as of Dec. 31, 2016. The common equity Tier 1 and additional Tier 1 ratios for the quarter came in at 7.18% and 1.47%, respectively, compared with 7.00% and 1.50% a quarter earlier and 7.68% and 0.83% a year earlier.

As of Feb. 2, US$1 was equivalent to 64.19 Indian rupees.