State-owned Union Bank of India today reported 66 per cent decline in net profit

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to Rs 197 crore for the third quarter ended December 31, because of rise in bad assets and depreciation on investments.

The bank had posted net profit of Rs 579 crore for the October-December quarter in 2010-11, UBI said in a filing to the BSE.

"Increase in provisions towards non-performing assets (NPAs), restructured advances and depreciation on investments have weighed on net profit of the bank," it said.

Even the provision coverage ratio of the bank decreased to 63.14 per cent of the NPA as against 70.20 per cent at the end December 2010.

Bank's gross NPA increased to 3.33 per cent at the end of third quarter as compared to 2.68 per cent in December 2010.

However, the total income of the lender rose to Rs 5,966.82 crore during the October-December period from Rs 4,693.06 crore in the same period last year.

During the first nine months of 2011-12, the net profit of the bank has dipped 32 per cent to Rs 1,013.94 crore from Rs 1,484.88 crore in the same period a year ago.

It has reported total income of Rs 16,977.87 crore in the first three quarters, compared to Rs 13,275.59 crore in the same period last financial year.

Besides, the board of the Union Bank of India has also approved issuance of about 1.16 crore shares of face value of Rs 10 to Government of India on preferential basis.

This will increase the government's stake to about 58 per cent, from 57.07 per cent in the Mumbai-based bank.