Union Bank of India (UNIONBANK) Q4 02/03 earnings summary

Executive summary

• FY2002-03 operating profit rose 49.94% to Rs.1,304 crore and net profit rose 76.11% to Rs.553 crore; business reached Rs.71,398 crore.

• Deposit growth remained moderate amid drought and slower GDP growth, while advances, retail lending and treasury activity supported earnings.

• The first public share issue in Aug 2002 was subscribed 5.2 times, bringing in 3.25 lakh investors.

Financial highlights

• Interest earned was Rs.4,306 crore versus Rs.4,016 crore; other income increased to Rs.825 crore from Rs.499 crore, including Rs.475 crore net profit on investment sales.

• Total income rose to Rs.5,131 crore from Rs.4,515 crore; interest expense was Rs.2,809 crore and operating expenses were Rs.1,018 crore.

• Deposits increased 12.45% to Rs.44,749 crore; advances rose 18.62% to Rs.26,649 crore and total business reached Rs.71,398 crore.

• Savings deposits rose to 24.97% of total deposits from 24.38%; low-cost deposits were Rs.16,208 crore, or 36.22% of deposits.

Outlook and guidance

• FY2003-04 outlook was cautiously positive, supported by expected agricultural improvement, lower oil prices, stronger industrial output and buoyant exports.

• Planned CBS expansion: ~100 branches in FY2003-04 and 500 by March 2005; broader connectivity was expected to enable anywhere, anytime banking.

• The 90-day NPA recognition norm was due by 31 March 2004; Rs.21.43 crore of ad hoc provisions had been set aside toward transition.