Newly appointed Managing Director and Chief Executive Asheesh Pandey said the lender will strike a balance between revenue growth and protecting profits going forward.
On speculation about a new round of consolidation among state-owned lenders, and whether the bank will merge with one of its peers, Pandey declined to comment. Without denying any speculation, he said things are “evolving.”
During the quarter, it reported a 2.6 per cent decline in net interest income to Rs 8,812 crore due to softer loan growth of less than 5 per cent and also a narrowing of net interest margin to 2.67 per cent, compared to 2.90 per cent in the year-ago period.
Pandey did not share a specific target on credit growth for FY26, but added that it still aims to grow the portfolio by 8-10 percent on the back of faster retail credit growth.
The bank’s chief financial officer Avinash Prabhu said lending to corporates has increased by only 1 percent as it is uncomfortable with the rates demanded by borrowers. Other income fell 6.24 per cent year-on-year to Rs 4,996 crore, driven by a 70 per cent decline in profit on sale of investments at Rs 192 crore and a 36 per cent decline in recovery of written-off accounts of Rs 913. Kamath pointed out that the Rs 500 crore decline in recovery aspects was one of the key reasons that dented the overall profit decline.
It reported a gross slippage of Rs 2,151 crore, down from Rs 2,345 crore in the quarter-ago period and Rs 5,219 crore in the year-ago period. This was one of the factors that led to the massive fall in bad asset provisions to over Rs 500 crore.
Total provisions fell to Rs 2,565 crore from Rs 3,393 crore in the year-ago period, and Kamath said it accelerated standard asset provisions to Rs 882 crore, against a reversal of Rs 1,029 crore in the year-ago period.
This was done as part of a transition to the expected credit loss system of provisions, he added.
The total gross non-performing assets ratio improved by 1.07 percent year-on-year to 3.29 percent as of September 30.
The bank’s overall capital adequacy stood at a comfortable 17.07 percent, while core buffers stood at 14.37 percent.
The Union Bank of India scrip closed 2.6 per cent lower at Rs 142.35 apiece on the BSE on Thursday, against a 0.7 per cent correction on the benchmark.
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