In This Article:
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Net Profit: INR 4,704 crores, 28.2% YoY growth for Q3 FY25.
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Net Profit for Nine Months: INR 13,002 crores, 25.8% YoY growth.
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Return on Assets (ROA): 1.3%.
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Return on Equity (ROE): 17.75%.
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Capital Adequacy Ratio: 16.72%.
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CET1 Ratio: 13.59%.
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Gross NPA: Reduced by 98 bps YoY to 3.85%.
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Net NPA: Improved by 26 bps to 0.82%.
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Provision Coverage Ratio: Increased by 88 bps to 93.42%.
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Credit Cost: 63 bps.
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Slippage Ratio: Improved to 89 bps.
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Deposit Growth: Moderated to 3.8%.
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Advances Growth: 5.9%.
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Net Interest Margin (NIM): 2.94% for nine months ended December 2024.
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Gross Slippage: INR 9,506 crores for nine months.
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Net Slippage: INR 8,941 crores.
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Gross Recoveries: INR 10,789 crores.
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Branch Network: Total of 8,574 branches with 146 new branches added in FY25.
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CASA Accounts: 32 lakh new accounts opened in the first nine months of FY25.
Release Date: January 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Union Bank of India (BOM:532477) reported a net profit of INR 4,704 crores for Q3 FY25, marking a 28.2% year-on-year growth.
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The bank's return on assets improved to 1.3% and return on equity reached 17.75%.
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Capital adequacy ratio stood at 16.72% with a CET1 ratio of 13.59%, indicating strong capital health.
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Gross NPA reduced by 98 basis points year-on-year to 3.85%, and net NPA improved by 26 basis points to 0.82%.
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Union Bank of India launched several innovative initiatives, including Nari Shakti branches and digital transformation projects, to enhance customer service and operational efficiency.
Negative Points
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Deposit growth moderated to 3.8% due to the bank's decision to shed high-cost bulk deposits, impacting overall business growth.
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The bank's credit growth was at 5.9%, which is lower than the industry average and below its own guidance range.
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Non-interest income, particularly from recoveries and treasury income, showed signs of pressure, impacting overall profitability.
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The bank's SMA-2 accounts increased significantly, indicating potential stress in certain loan segments.
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Union Bank of India faces challenges in maintaining growth momentum in the SME and agriculture sectors, with some reclassification impacting reported figures.
Q & A Highlights
Q: The bank's business growth seems lower compared to other PSBs. What are the future prospects for regaining growth levels? A: Arumugam Manimekhalai, CEO, stated that the bank is focused on sustainable growth with a balanced approach to profitability and operational efficiency. The bank has strategically reduced high-cost bulk deposits to improve cost efficiency, impacting growth numbers. However, they are committed to long-term value creation and expect growth to align with the lower end of their guidance.