State-owned Union Bank of India reported a 21% year-on-year rise in net profit to Rs 1,848 crore in the quarter ended September 2022 on the back of strong credit growth.

The bank's loan book grew 22% YoY, with outstanding advances standing at Rs 7.73 trillion as of 30 September 2022. Retail, agriculture and MSME (micro, small and medium enterprises) segments grew 15%. Corporate loans, led by infrastructure, iron and steel, chemicals and NBFCs (non-banking financial companies), grew 22%.

Union Bank of India managing director and CEO A Manimekhalai said the bank is looking to post a 10% to 12% credit growth in FY23, despite reporting strong growth in the second quarter.

MSME loans stood at Rs 1,20,069 crore as of 30 September, up from Rs 1,04,436 crore a year ago. The bank said it has 126 MSME loan points and 105 MSME first branches across the country. Under the Union Guaranteed Emergency Credit Line initiative as per the ECLGS guidelines, the bank had sanctioned 3,73,894 loans involving Rs 10,703 crore.  

Union Bank of India's net interest income (NII) was up 21.61% YoY in the fiscal second quarter to Rs 8,305 crore.

Net interest margin (NIM) improved to 3.15% from 2.95%.

Non-interest income fell 17.65% YoY to Rs 3,276 crore in the September quarter.

The bank’s asset quality improved with gross non-performing assets (NPAs) at 8.45% as of 30 September 2022, compared with 12.64% a year ago. Net NPAs declined to 2.64% from 4.61%.

The provision coverage ratio rose to 86.61%, up from 81.77% a year ago.

Deposits grew 14.14% YoY to Rs 10.43 trillion in September 2022.