Union Bank of India (UNIONBANK) Q4 99/00 earnings summary

Executive summary

• FY1999-2000 net profit after tax was ₹101.24 crore, down from ₹160.22 crore; total deposits rose 10.6% and advances grew 33.8%.

• Credit expansion lifted the credit-deposit ratio to 48.2% from 39.8%; capital adequacy improved to 11.42%, above the 9% requirement.

Financial highlights

• Total income was ₹3,614.22 crore versus ₹3,131.63 crore; interest earned was ₹3,315.11 crore versus ₹2,869.04 crore.

• Interest expense rose to ₹2,358.03 crore from ₹2,037.50 crore; operating expenses increased to ₹864.56 crore from ₹784.15 crore.

• Provisions and contingencies were ₹290.39 crore versus ₹149.76 crore; net profit after tax was ₹101.24 crore versus ₹160.22 crore.

• Deposits reached ₹31,105 crore, up 10.6%; gross advances rose 33.8% to ₹14,613 crore, and total business reached ₹45,718 crore from ₹39,054 crore.

• Net worth increased ₹64 crore to ₹1,747 crore; proposed dividend transfer to government was ₹20.25 crore, excluding ₹4.45 crore corporate dividend tax.

Outlook and guidance

• Management planned to expand income from equity and securities trading, targeting a manifold increase over the coming years from the year’s ₹43 crore net trading income.

• New deposit schemes aligned with market trends were planned; short-term deposits were identified as a way to lower funding costs across the banking system.

• WAN infrastructure was intended to support future anytime-anywhere and internet banking channels, while voice/FAX over IP expansion was expected to help reduce operating costs.