Union Bank of India on Monday announced a net profit of Rs 1,330 crore for the March quarter (T4FY21), against a loss of Rs 7,157 crore in the same quarter last year. The lender is back in the dark due to growth in other income and declining provisions.

Total provisions decreased 64% year over year (year over year) and 16% sequentially to Rs 3,850 crore. Net Interest Income (NII) decreased 9% year on year to Rs 5,403 crore.

Non-interest income increased 50% qoq (qoq) and 23% year-on-year to Rs 4,551 crore, mainly due to the recovery of written off accounts. Overall net profit for FY21 was Rs 2,906 crore compared to a net loss of Rs 6,613 crore in FY20.

Rajkiran Rai G, Managing Director and CEO, said: “There was no significant impact on the recovery in April and May, the impact is expected to be in the range of 2-3%. We expect credit growth of 8-10% in FY22. “

Net Interest Margins (NIM) improved 55 basis points (bps) year-on-year and 58 bps sequentially to 2.4%.

The quality of assets improved during the quarter under review. The gross non-performing assets (PNA) ratio improved 154 basis points to 13.74%, compared to reported pro forma gross PNAs of 15.28% in the previous quarter. Likewise, the net ANP ratio improved 40 basis points to 4.62% from 5.02% in the December quarter.

“The bank expects a recovery of Rs 13,000 crore in FY22,” Rai said. The lender also identified accounts worth Rs 7,800 crore to send to the National Asset Reconstruction Company (NARCL). Overall, the banking industry may have identified accounts close to Rs 89,000 crore to send to NARCL during phase 1, said Rai, who is also chairman of the Association of Indian Banks.

Advances were down 2% year-on-year to Rs 6.5 lakh crore. The retail loan portfolio, however, grew 10% year-on-year to Rs 1.25 lakh crore. Progress in agriculture increased 12% year-on-year to Rs 1.2 lakh crore.

Deposits increased 6% yoy and 5% qoq to 9.23 lakh crore. The current account savings account (CASA) grew 13% yoy and 7% qoq to Rs 3.35 lakh crore. The solvency ratio (CAR) remained at 12.56%, with a CET1 ratio of 9.07% at the end of March 2021.