Asset quality continues to remain under pressure Union Bank of India (UBI) reported its 2QFY16 profits ahead of both our and street estimates driven by lower provision and higher treasury income. Provision expenses declined 32.7% qoq to Rs4.3bn led by reversal of MTM provision on AFS portfolio during the quarter. Treasury income grew by 245.3% yoy and 32.8% qoq to Rs2.6bn as the bank took advantage of declining yield in GSec market. Fresh slippages increased sequentially to Rs19.3bn (slippage ratio of 3.1%) v/s Rs15.1bn (slippage ratio of 2.4%) in 1QFY16 and Rs19.7bn (slippage ratio of 3.4%) in 2QFY15. Higher slippage was...