State-run Union Bank of India on Thursday reported a 10% decline in September quarter profit at ₹4,249 crore, driven by a decline in core income and also recoveries from written-off accounts.
Its newly appointed Managing Director and Chief Executive Asheesh Pandey said the lender will be "balancing" between topline growth and protecting bottomline from hereon.
On the speculation about another round of consolidation among state-run lenders, and if the bank will merge with one of its peers, Pandey declined comment. Without denying any speculation, he said things are "evolving".
During the quarter, it reported a 2.6% dip in the core net interest income at ₹8,812 crore due to a softer loan growth of less than 5 per cent and also a narrowing of the net interest margin to 2.67% from 2.90% in the year-ago period.
Pandey did not share a specific target on the loan growth for FY26, but added that it still aspires to grow the book at 8-10% on the back of faster retail loan growth.
The bank's chief financial officer Avinash Prabhu said it grew large corporate credit by only 1% because it was not comfortable with the rates demanded by the borrowers.
The other income declined 6.24% year-on-year to ₹4,996 crore, driven by a 70% drop in profit on sale of investments at ₹192 crore and a 36 % decline in recovery from written-off accounts at ₹913 crore during the quarter.
Kamath pointed out that the ₹500 crore decline in the recoveries aspects was one of the major reasons which dented the overall profit decline.
It reported gross slippages of ₹2,151 crore, down from ₹2,345 crore in the quarter-ago period and ₹5,219 crore in the year-ago period. This was among the factors that led to the massive decline in provisions for bad assets to over ₹500 crore.
The overall provisions declined to ₹2,565 crore from ₹3,393 crore in the year-ago period, and Kamath said it accelerated the standard asset provisions to ₹882 crore as against a write-back of ₹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.
