Source: Debt Recovery Guru
Higher provisions towards pension liabilities and non-performing assets have impacted Union Bank of India's net profit, which was flat for the fourth quarter as well as for the just ended fiscal.
For the quarter ended March 31, 2011, the bank recorded a net profit of Rs 598 crore (Rs 594 crore), while for the fiscal 2010-11 it was Rs 2,082 crore (Rs 2,075 crore).
The bank provided Rs 779 crore for pension and gratuity liabilities, of which, Rs 300 crore is a one-time exceptional expense pertaining to liability on account of second pension option by retired employees.
Provisions on NPAs increased to Rs 1,188 crore (Rs 699 crore) during the year.
During the fiscal, slippages declined from Rs 1,130 crore in the second quarter, to Rs 765 crore in the third quarter and further to Rs 406 crore in the fourth quarter.
For the current fiscal, the bank is targeting advances growth of 22 per cent, deposit growth of 20 per cent, NIM at 3.2 per cent and gross NPA at 1.85 per cent.
The bank's mutual fund subsidiary, Union KBC Asset Management Company, has received the final approval from SEBI and is expected to launch its first mutual fund product later this month, said Mr S. C. Kalia, Executive Director of the bank. The first product will be an equity-oriented one.