Union Bank of India share price target

Underpromise, overdeliver

Union Bank hosted an Analyst Meet to give an update on its recent performance and outlook on growth, margins, and asset quality.

Union Bank of India (UNBK) reported 3QFY25 PAT of INR46b (28.2% YoY, 27% beat), led by lower provisions and higher-than-expected other income.

Strong non-interest income (treasury and recovery) counterbalanced lower margins (due to penal charges reclassification), resulting in Union Bank of India’s decent operating performance and better RoA.

We attended the analyst meet hosted by the entire top management team of Union Bank (UNBK). The management emphasized the bank's efforts in delivering profitable
growth while continually making investments in the business and enhancing the technological capabilities of the bank.

Union Bank reported an 11% miss on PAT at Rs33bn (vs Emkay est.: Rs37bn)
owing to impact of wage revision (Rs13.3bn) and tax expenses, which overrode
the benefits from higher treasury income and reversal of NPI provisions.

Union Bank of India (UNBK) reported 19% YoY growth in PAT at INR33b
(14% miss) in 4QFY24 as opex increased 13.7% YoY to INR76b (24% higher
than MOFSLe).

Asset quality improved, with fresh slippage moderating 49% QoQ to ~2.3% annualized. Healthy upgrades and recoveries, coupled with continued writeoffs, enabled 3%/6% QoQ decline in GNPA/NNPA. UNBK continues to carry a 65% provision on SREI Infra, while it has ~30% coverage on retail...

Post amalgamation of Andhra Bank & Corporation Bank into Union Bank of India, UBI today is a leading PSU bank with a network of over 9200 branches and over 11600 ATMs. The bank's total business as of 2QFY22 stood at 15.5tn, comprising 9.1tn of deposits and 6.4tn of advances as of 30th September 2021. The bank has different lending verticals; retail, agriculture, MSME and...

Benefit from revival in PSU Banks: With the government focusing on reviving growth in the economy, PSU Banks will have to play a key role in jumpstarting infrastructure and capital intensive industries. This is likely to result in consolidation and pushing up reforms in this space.