Hold Union Bank of India - Geojit BNP Paribas Financial Services

- PAT grew 37.7% y-y to Rs.300. PAT was below market estimates due to higher provisions as the bank raised its provision coverage ratio to 50% from 45% in 2Q.

- NII at Rs.1890 crore was marginally lower than market estimates.

- Asset quality improved q-q, which was the main positive in the result.

- GNPA fell 30bps q-q, mainly due to lower annualized slippages at 1.73% against 2.15% in 2Q.

- Union Bank's asset quality trend seems to have reversed, which is a big positive compared to peers.

- The asset quality performance, which had been very volatile in the past, is now falling in line with management guidance. Hence, volatility in the stock price is expected to come down.

- Maintain 'hold' rating on the stock.

Source : Equity Bulls

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