New Delhi: Union Bank of India on Saturday reported an 80.57 percent jump in March quarter net profit at Rs 2,811 crore helped by a huge jump in recoveries from written-off accounts. The state-owned lender's net profit in entire 2022-23 was Rs 8,512 crore as against Rs 5,265 crore a year ago.


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In the March quarter, it's core net interest income increased 21.88 percent to Rs 8,251 crore on the back of 13 percent growth in advances and a widening of net interest margin to 2.98 percent from 2.75 percent in the year-ago period. (Also Read: World's Top 5 Currency: Check Out List)


Non-interest income grew 62.48 percent to Rs 5,269 crore in January-March 2023, helped by handsome performance on the recoveries front. Recoveries from accounts written off in the past zoomed to Rs 2,954 crore from Rs 294 crore in the year-ago period, providing a boost to the bottom line. (Also Read: Sundar Pichai, Tim Cook, Satya Nadella, And Other Top CEOs Salary Details)


Managing Director and chief executive A Manimekhalai said the bank started FY23 with a recovery target of Rs 15,000 crore but exceeded its own expectations by recovering over Rs 20,000 crore of advances.


On the advances side, she said the bank is aiming for an overall loan book growth of 10-12 percent in FY24, and added that it sees a healthy demand on the corporate advances front where the loan pipeline is over Rs 35,000 crore.


Hybrid annuity model-based road projects, renewables, steel, and cement sectors are among those having the most healthy loan demand among the corporates, she said, adding that in FY23, the overall corporate loan book grew 11 percent.


The bank's fresh slippages were reduced to Rs 2,687 crore during the quarter under review, and the gross non-performing assets ratio improved to 7.53 percent as against 11.11 percent in the year-ago period and 7.93 percent at the end of December 2022.


It set aside Rs 2,935 crore as provisions for the quarter as against Rs 3,618 crore in the year-ago period, which also helped the profit growth. The bank's overall capital adequacy stood at 16.04 percent with the core tier-I buffers at 12.36 percent as of March 31, 2023.


Manimekhalai said the bank's board has approved a Rs 10,000 crore capital raising plan, which will include Rs 8,000 crore of fresh equity capital to bolster the core buffer, Rs 1,000 crore of additional tier-I capital, and Rs 1,000 crore in tier-II capital.


The bank will decide on the capital raising route and the timing based on the market conditions, she said, adding that the capital raise will also help bring down the state holding in the lender to under 75 percent mandated by markets regulator Sebi by August 2024. At present, the Government of India holds over 83 percent of UBI.


She also said the National Asset Reconstruction Company has so far identified 42 accounts totalling dud assets of Rs 1.62 lakh crore. UBI has exposures in 24 of the identified accounts, she added.