Union Bank of India (UNIONBANK) Q4 18/19 earnings summary

Executive summary

• FY19 net loss narrowed to ₹2,948 crore from ₹5,247 crore YoY, while operating profit eased to ₹7,521 crore from ₹7,640 crore.

• Net interest income rose 9.8% to ₹10,215 crore; gross NPA fell to 14.98% from 15.73%, and provision coverage reached 66.2%.

• Deposits grew 1.8% to ₹4,15,915 crore and gross advances grew 3.7% to ₹3,25,392 crore; no dividend was declared.

Financial highlights

• Total income was ₹38,541 crore, up 2.13% YoY; interest earned increased 4.03% to ₹34,067 crore, while other income declined 10.34% to ₹4,474 crore.

• Interest expense rose 1.74% to ₹23,852 crore; NII increased 9.78% to ₹10,215 crore.

• Operating expenses increased 7.71% to ₹7,168 crore; provisions fell 18.76% to ₹10,469 crore.

• Standalone net loss was ₹2,948 crore versus ₹5,247 crore in FY18; EPS was -₹25.08 versus -₹69.45.

Outlook and guidance

• FY20 outlook anticipated stronger private consumption and investment, recovering corporate credit demand, and support from lower inflation and a cumulative 50 bps repo-rate reduction.

• Priorities included growth initiatives, process redesign, analytics-led sales campaigns, stronger digital channels, and rebalancing assets and liabilities to support margins and capital needs.

• Plans included expanding Union Samridhi Kendras from 38 to 68 by March 2020 and raising equity capital of up to ₹4,900 crore, subject to approvals.