Union Bank of India’s second quarter (July-September) profit after tax fell 62 percent year-on-year to Rs 208 crore, dented by higher provisions. Net interest income of the bank (the difference between interest earned and interest expended) rose 6 percent Y-o-Y to Rs 1,954 crore in three-month period ended September 2013.

Provisions and contingencies jumped 92 percent on yearly basis (up 37 percent sequentially) to Rs 937 crore in the quarter gone by. Provision coverage ratio (PCR) declined to 60.43 percent in September quarter from 63.4 percent in June quarter.

Asset quality worsens Q-o-Q Gross non-performing advances (NPAs) as a percentage of gross advances increased 14 basis points on sequential basis to 3.64 percent and in absolute term, gross NPAs climbed nearly 14 percent to Rs 8,061 crore during September quarter. Net NPAs as a percentage of net advances rose 19 basis points Q-o-Q to 2.15 percent and in absolute term, that increased 20 percent to Rs 4,670 crore during July-September quarter.

As on 14:01 hours IST, shares of Union Bank of India rose 6.4 percent to Rs 122.35 on the BSE. The rally in shares may be because of up-move in other PSU banks post their second quarter earnings.

Source : Lokesh Shastri