Union Bank - Q1FY2014 Result Review - Angel Broking

Union bank reported modest operating performance for the quarter. NII for the bank grew by 4.8% yoy. Non-interest income grew strongly by 54.0% yoy, probably boosted by treasury gains. Overall, pre-provisioning profit for the bank grew by 11.4% yoy. On the asset quality front, the bank witnessed significant asset quality stress during the quarter, as Gross and Net NPA levels increased sequentially by around 12.3% and 15.8% respectively. Bank increased Provisioning expenses by 31.5%, thus limiting in bottom-line growth of 9.5% yoy.

Considering recent macro developments in a weak economic environment, we believe that asset quality stress is unlikely to abate as quickly as was anticipated earlier.. Hence, we maintain our Neutral recommendation on the stock.

Source : Equity Bulls

Keywords