The non-performing assets ratio for Union Bank of India fell to over a decade low in the first quarter of this financial year.
As per a Moneycontrol analysis, gross non-performing assets ratio of the bank stood at 4.54 percent in Q1FY25, which was at a 10-year low, and net non-performing assets (NPA) ratio stood at 0.90 percent, which is almost a 14-year low.
The gross NPA ratio was last seen below this level in 2014, and the net NPA ratio below this was seen in March 2010. The bank management expects the gross NPA ratio to reach below 4 percent by the end of this fiscal.
On stable asset quality, brokerage firm Motilal Oswal Financial Services said healthy recoveries and a consistent decline in restructured assets (1.3 percent) provided a healthy outlook for the asset quality.
In the April-June quarter, Union Bank's gross NPA in absolute terms stood at Rs 41,423 crore, and net NPA at Rs 7,902 crore.
The lender in the reporting quarter made a provision of Rs 1,651 crore on NPAs, which was lower than the year ago period, but higher on a sequential basis.
The lender has also made a higher provision on standard assets in the April-June quarter. The bank's management said the bank has considered some accounts with potential stress, which are primarily domestic accounts, and has made additional standard provisions this quarter.
In the reporting quarter, the slippage ratio for the lender eased to 1.08 percent, sharply down from 1.56 percent in the quarter-ago period and 1.73 percent in the year-ago period.
Antique Stock Broking in a July 22 report said the bank posted an annualised gross slippage ratio of 1.2 percent (as against 1.7 percent in 4QFY24) due to decline in slippages across business segments with agriculture slippages declining from 3.4 percent to 1.5 percent QoQ, SME slippages from 3.6 percent to 2.2 percent QoQ and retail from 1.8 percent to 1.6 percent QoQ.
On July 19, the state-owned lender reported a 13.68 percent on-year rise in its profit after tax to Rs 3,679 crore in the first quarter of the current financial year.
On a sequential basis, net profit has risen 11.11 percent.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
