Pedestrians walk past a union bank of india Ltd. bank branch in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg)

No Issues With IL&FS Accounts So Far, Says Union Bank Of India’s MD

Union Bank of India has a small exposure to debt-ridden IL&FS Ltd. and all the accounts have been performing for now.

“Our total to IL&FS group is around Rs 1,100 crore, out of which 80 percent is to a thermal power project,” Managing Director and CEO Rajkiran Rai told BloombergQuint in an interaction. “We do not foresee any much problem over there.”

The state-controlled lender posted a surprise quarterly profit as it set aside lower provisions for bad loans.

Key Earnings Highlights (Q2, Year-on-Year)

  • Net interest income rose 7.4 percent to Rs 2,493.1 crore.
  • Net profit stood at Rs 139 crore versus net loss of Rs 1,530.7 crore.
  • Net non-performing assets at 8.42 percent versus 8.70 percent in the preceding quarter.
  • Provisions for NPAs at Rs 1,710 crore versus Rs 1,803.2 crore in the previous quarter.
  • Gross NPA stood at 15.74 percent versus 16 percent in the June quarter.

Rai said the bank will need to raise about Rs 1,500 crore by March to meet its minimum capital requirement. "We need to moderate growth and capital requirement as we don’t want to dilute much equity at the current levels. Most of it [capital] is likely to come from the government.”

Watch the full interaction here: