Union Bank of India - March 2013 Results Preview - Motilal Oswal

- On a YoY basis, loan and deposit are expected to grow by 15% each, while on a sequential basis, loan growth is expected to be strong at 10% (partially seasonal in nature).

- NIMs are expected to remain largely stable QoQ at 2.9% (calculated).

- Over last two quarters, performance in asset quality has been better than peers. We expect the healthy trend to continue and have factored a net slippage ratio of 0.6%. Hence, GNPA (%) is expected to decline to ~3% v/s 3.4% in 3QFY13.

- Restructured loan portfolio is expected to rise led by CDR cases and stress in large and mid-corporate segment.

- The stock trades at 0.7x FY14E and 0.6x FY15E BV, and 4.9x FY14E and 4x FY15E EPS. Buy.

Source : Equity Bulls

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