Views on Union Bank of India 1QFY2017 Results: Angel Broking

Views of Mr. Siddharth Purohit (Sr. Equity Research Analyst - Banking, Angel Broking) on Union Bank of India 1QFY2017 Results:

Union Bank of India's NPAs continue to be under pressure;

"Union Bank of India has reported a mixed set of results for the quarter. While the bank disappointed on the NII front which declined by 1.3%, higher other income up by 33% YoY led by treasury gains resulted in 9% gain in the operating profit. Though provisioning remained lower QoQ it was still high at INR 1353cr and credit cost was high at 2.1%. GNPAs % went up to 10.16% compared to 8.70% in 4QFY16. While NNPAs went up to 6.16% vs 5.25% QoQ. In absolute terms GNPAs went up by 13% YoY to INR 27,281 cr. On the business front the bank continued to disappoint with advances and deposits growing by 3.5% each. The CAR of the bank remains weak at 10.75%, while the Governments infusion of INR 721cr will help to some extent, however we feel the NNPAs of 6.16% indicates lot of provisioning is to be done in the quarters to come, we don't expect material change in the earnings due to the above factors. We have a NEUTRAL rating on the stock."

Shares of UNION BANK OF INDIA was last trading in BSE at Rs.137.15 as compared to the previous close of Rs. 132.35. The total number of shares traded during the day was 935823 in over 8887 trades.

The stock hit an intraday high of Rs. 137.9 and intraday low of 133.65. The net turnover during the day was Rs. 126837518.

Source : Equity Bulls

Keywords