UB profits drop sharply in 1Q
View(s):Union Bank’s pre-tax profit fell sharply by 94 per cent to Rs.5.7 million in the first quarter of this year compared to last year’s gain of Rs.105 million. No reason was given for the sharp drop.
Profit for the period was accounted for at Rs.7. 6 million compared to Rs. 63 million, which was a notable drop of 88 per cent, results release by the bank stated.
It was further noted that the group profits before tax were also down to Rs.26 million compared to Rs.99 million in the same period last year.
Earnings per share was down by 68 per cent in terms of group accounts indicating the share profit decline to Rs.0.05 during the first quarter this year from Rs.0.17 for the same period in 2013.
The bank’s earnings per share dipped to Rs.0.02 compared to Rs.0.18 in 2013 for the quarter, results released by the bank stated. Earlier the Business Times reported that the bank was closing a deal with the Texas Pacific Group Asia VI (TPG), a US based leading global private investment firm to secure a 15 per cent stake worth Rs.15 billion.
TPG, with a US$70 billion balance sheet, completed its due diligence pertaining to their ‘indication of interest’ in the Union Bank recently, sources close to the deal said. Union Bank, which has 77 per cent in UB Finance, isn’t planning to sell the finance company but will go public with this company as per Central Bank guidelines in the short term, an official was reportedly quoted.
In a corporate disclosure issued on March 5 to the stock exchange, the bank stated that there was no definitive agreement yet on any final aspects of the proposed transaction. They stated that the bank had received a Non-Binding Indicative Term Sheet governing further negotiations on the proposed acquisition of its shares by TPG.