Union Bank of India, the state-owned lender, has unveiled its financial performance for the first quarter of the fiscal year 2023-24 (Q1FY24), showcasing remarkable growth and improved asset quality.
Union Bank of India Q1FY24 Results – Key Points:
- Union Bank of India standalone net profit doubles to ₹3,236 crore in Q1 FY2024, reflecting a 107% YoY surge.
- Improved asset quality with a decrease in gross NPA ratio by 288 bps and net NPA ratio by 173 bps compared to the previous year.
- Net interest income (NII) grows by 16.59% YoY to ₹8,840 crore, supported by a rise in net interest margins (NIM) to 3.13%.
- Strong advances growth, with total advances increasing by 12.33% YoY, and a focus on financial inclusion through various government schemes.
Union Bank of India Q1FY24 Standalone Net Profit Soars
Union Bank of India reported an exceptional 107 percent year-on-year rise in its standalone net profit, reaching an impressive ₹3,236.44 crore in Q1FY24. Comparatively, the bank’s profit in the corresponding period last year was ₹1,558.46 crore.
Factors Contributing to Growth
The bank’s astounding financial performance can be attributed to several key factors. Notably, there was a significant improvement in asset quality, as evidenced by the gross non-performing asset (NPA) ratio improving by 288 basis points (bps), and the net NPA decreasing by 173 bps compared to the same period last year.
Higher Core Income and Lower Provisions
Union Bank of India’s net interest income (NII), which represents the difference between interest earned and interest expended, increased by 16.59 percent year-on-year, reaching ₹8,840 crore in Q1FY24. Moreover, non-interest income, or other income, surged by 38.57 percent to ₹3,903 crore during the same period. The bank’s net interest margins (NIM) also improved to 3.13 percent, showcasing a growth of 13 bps from the previous year.
Union Bank of India Q1FY24 Encouraging Loan Growth
The bank’s total advances demonstrated a healthy growth rate, rising by 12.33 percent year-on-year, with global advances amounting to ₹8.19 lakh crore. Among the advances, the retail segment experienced the fastest growth at 16.47 percent year-on-year, followed by MSME lending at 14.88 percent.
Enhanced Financial Inclusion
Union Bank of India remains committed to financial inclusion initiatives. During the quarter ending June 30, the bank facilitated 4.63 lakh new enrollments under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY). Additionally, accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY) increased by 14.06 percent year-on-year, reaching 2.84 crore accounts with a cumulative balance of ₹9,002 crore.
Positive Market Response
Following the impressive financial results, Union Bank of India’s shares closed 2.29 percent higher at ₹86.9 apiece on the Bombay Stock Exchange (BSE) on July 20, 2023.
Also read other earnings related articles:
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Union Bank of India Q1FY24 Results: Outlook and Conclusion
The remarkable performance in Q1FY24 indicates Union Bank of India’s resilience and effective management in navigating challenging economic conditions. With its strengthened asset quality, improved net interest income, and continued focus on financial inclusion, the bank appears well-positioned for further growth in the coming quarters.
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