State-run Union Bank of India, which amalgamated Andhra Bank and Corporation Bank from April 1, reported a standalone net profit of Rs 333 crore in the quarter ended June.
The amalgamated entity had booked a profit-after-tax of Rs 381 crore in the same period of the previous fiscal. The pre-amalgamated profit in the June 2019 quarter was Rs 224.43 crore.
"Overall the performance of the amalgamated entity was quite satisfactory. Amalgamation is proceeding as per the fixed timelines," the bank's managing director and CEO Rajkiran Rai G told reporters. He said the bank saw a substantial improvement in its net interest income and also on the operating profit side.
Net interest income rose by 17.1 per cent to Rs 6,403 crore as compared to Rs 5,468 crore.
Global net interest margin (NIM) stood at 2.52 per cent whereas domestic NIM stood at 2.56 per cent.
Rai said as of June 30, 28 per cent of the bank's term loans were under moratorium. Close to 35 per cent of its retail book was under moratorium.
Gross non-performing ratio improved to 14.95 per cent compared to 15.59 per cent. Net NPA ratio improved to 4.97 per cent from 6.47 per cent.
Provision coverage ratio (PCR) improved to 79.87 per cent as against 73.38 per cent.
Fresh slippages in the quarter stood at Rs 1,750 crore. Recoveries were at Rs 751 crore in the period.
Rai said the bank has received board approval for restructuring of personal loans affected by COVID-19 related stress.
"For personal loans, we went to the board and we got the approval from the board today. So we will put standard operating procedures (SOPs) and other structures by next week and will give it to branches so that they can start (restructuring of) the personal loan part," he said.
The lender has identified some personal loans accounts that are eligible for restructuring.
For corporate loans, he said, the bank will have to wait till September 6 when the final guidelines by the Kamath committee will come.
Rai said he expects a credit growth of 6-7 per cent in the current fiscal.
The bank has also started the process to sell its stake in Star Union Dai-Ichi Life Insurance, where its holding is around 25.10 per cent. The lender expects to complete the process by December-end.
The bank's scrip closed 1.84 per cent up at Rs 30.45 apiece on the BSE.