Union Bank of India on Monday reported a 49% year-on-year increase in its net profit to Rs 1,085 crore during the October-December quarter, on the back of lower provisions and healthy net interest income (NII) growth. However, the bank’s bottom line fell 29% on a sequential basis.

Net interest income — the difference between interest earned and interest expended — rose 8.9% on year to Rs 7,174 crore in the reporting quarter. Net interest margin (NIM) also improved to 3% from 2.95% a quarter ago and 2.94% a year ago.

Union Bank’s asset quality improved during the quarter under review, with the lender reporting a gross non-performing asset (GNPA) ratio of 11.62% as of December-end, lower than 12.64% as of September-end and 13.49% during the corresponding period a year ago. Net NPAs, however, increased to 4.09% as on December 31 from 3.27% a year ago. Credit cost, or the amount set aside for bad loans, stood at 1.40% as of December-end, lower than 2.31% the previous quarter and 1.86% a year ago.

Provisions and contingencies stood at Rs 2,549.6 crore during October-December, sharply lower than Rs 5,210 crore a year ago and Rs 3,723.7 crore a quarter ago. Provision coverage ratio as of December-end stood at 82.80%. The bank’s capital adequacy ratio stood at 13.92% by December-end, of which common equity tier-I capital was 10.18%.

Union Bank’s gross advances grew 2.7% on year to stand at Rs 6.69 lakh crore. Of the total advances, retail loans grew 9.8% on year to Rs 1.32 lakh crore as of December-end, agricultural loans rose 11.1% to Rs 1.28 lakh crore, while loans to micro, small and medium enterprises grew 6.4% on year to Rs 1.11 lakh crore. The bank’s yield on advances rose 8 basis points on a sequential basis to 7.20% during October-December.

On the liabilities side, the lender’s total deposits rose 6.2% on year to Rs 9.37 lakh crore. Of these, low-cost current account and savings account (CASA) deposit stood at Rs 3.46 lakh crore, up 11.1% on year. In percentage terms, the bank’s CASA ratio stood at 36.99%.