Union Bank shares rise 4% after Q4 profit jumps 50%; management flags margin pressure
[hfe_template id='11223']
[ad_1]
Union Bank of India shares rose by 3.9% to their day’s high of Rs 127.75 on the BSE on Monday after the state-run lender reported a 50% year-on-year jump in net profit to Rs 4,985 crore for the March quarter. However, the bank also flagged potential pressure on net interest margins (NIMs) due to possible rate cuts by the Reserve Bank of India. The bank had reported a net profit of Rs 3,311 crore in the same quarter last year. Total income rose to Rs 33,254 crore from Rs 31,058 crore a year earlier. While net interest income (NII) remained flat at Rs 9,514 crore, an 18% rise in non-interest income to Rs 5,559 crore and a 16% decline in provisions to Rs 2,715 crore helped boost profitability. The bank’s NIM stood at 2.91% in Q4—within its guided range—but Managing Director and CEO A. Manimekhalai acknowledged that further rate cuts could compress margins. “More than 29% of our book is linked to the repo rate and gets automatically repriced ...