Union Bank of India share price target

NII fell to Rs. 2136.62 Cr in Q3FY17 compared to Rs. 2277.44 Cr in Q2FY17. NII increased by 7.02% ( Rs. 140.11 Cr ) when compared with the same period last year.

Improving Outlook on Assets Quality & Operating Performance Union Bank of India (UBI) has delivered improved performance in 2QFY17 with its operating profit rising by 22.1% yoy & 12.0% qoq to Rs18.2bn, which is ahead of our expectation. Fresh slippages declined to Rs34bn during the quarter from Rs36bn in 1QFY17 along with 36% qoq rise in upgrades and recovery to Rs6.7bn. However, provisioning expenses increased further by (+274.6% yoy & 19.8% qoq) to Rs16.2bn due to ageing of existing NPAs. The Bank utilized higher gain from sale of investment which rose by 81.3% yoy & 47.5% qoq to Rs4.7bn with a view to improving...

UNKB’s stress addition remained elevated with slippages of 5.4% ann. and incremental 5:25/SDR of Rs 10.2/13.5bn. G/NNPA jumped ~13% to hit 10.2/6.2%. Loan growth was flat, even as the focus segments (Retail, Agri and MSME) grew 8-19% to form ~51% of loans. CASA ratio at 31.5% (+300bps YoY) was led by 15% SA growth. Net earnings were lower than estimates with NIM decline and higher provisions (2.1x YoY), despite controlled opex and higher treasury and Fx. income (+26% QoQ).HDFC Securities Maintain NEUTRAL with TP of Rs 137 (0.9x FY18E ABV of Rs 152).

Trendlyne has 7 reports on UNIONBANK updated in the last year from 3 brokers with an average target of Rs 168. Brokers have a rating for UNIONBANK with 1 downgrade,2 price downgrades and 2 price upgrades in past 6 months.

Better show on operating front, asset quality remains weak Union Bank of India (UBI) has reported improved performance with its operating profit rising by 9.2% yoy & 15.3% qoq to Rs16.3bn in 1QFY17, which is ahead of our expectation. The Bank reported Rs1.7bn net profit (+73% qoq and -67.9% yoy) primarily due to healthy growth in operating profit, 13.5% sequential decline in provisioning expenses to Rs13.5bn along with write-back of differed tax assets worth Rs2.5bn. Despite sequential moderation, fresh slippages remain elevated at Rs36bn in 1QFY17 compared to average run rate in pre-AQR quarters....

Despite better than expected fall in cost of funds (39bp QOQ to 5.8%), healthy SA growth (+15% YoY) elevated slippages continue to mar margin performance (flat QoQ at 2.3%) NII inline at INR21b (flat YoY). With CET 1 ratio at 8.3%, capital conservation efforts continue. Overall loans...

Union Bank's 4QFY16 PAT de-grew by 78% YoY to INR961m (57% miss), driven by weak core PPoP growth (-15% YoY) and high credit costs (3% v/s 2% in 3Q). Slippages increased sharply QoQ to INR61.7b (~10% of loans, annualized) v/s...

Union Bank of India (UBI) has negatively surprised us on both earnings and asset quality fronts in 4QFY16, primarily due to higher slippages as it has recognised further impairments and provisioning impact of asset reclassification. Slippages doubled to Rs61.7bn at annualized ratio of 9.7% in 4QFY16 v/s Rs34.1bn at annualized ratio of 5.4% in 3QFY16 and Rs129.5bn at annualized ratio of 5.1% in full FY16. Resultantly, UBI has reported Rs15.6bn provisioning, marking a rise of 54.9% yoy and 26.4% qoq. UBI's GNPA rose by 165bps qoq to 8.7% while NNPA inched up by 118bps qoq to 5.25% in 4QFY16 for which its PCR declined to 42% vis--vis 44.2% in 3QFY16...

Loanbook growth remained weak (+5% yoy) due to fall in corporate (6%) and SME loans (8%). Retail loan book grew 16% while agri was up 24%. Overseas loans, which contribute10%ofadvances,grew28%yoy....

In a systemically disastrous 3Q for PSBs, UNBK reported relatively better numbers with ~19% QoQ rise in GNPAs (~7.1%) vs. 24-50% reported by peers. We believe UNBK is weathering the storm with more grit and grace compared to its PSU brethren.

Union Bank of India negatively surprised us on both earnings and asset quality fronts in 3Q, primarily due to higher slippages as the bank recognised impairment as well as the ensuing provisioning impact of the asset reclassification in accordance with ongoing RBI's evaluation. Slippage came in high at Rs34.1bn (annualized ratio of 5.5%) v/s Rs19.3bn (3.1%) in 2QFY16 and Rs17.4bn (2.9%) in 3QFY15. As a result, the bank reported a provision of Rs12.4bn, an increase of 45.3% yoy and 186.2% qoq. GNPA increased 93bps qoq to 7.1% and NNPA increased by 68bps qoq to 4.1%. Consequently, PCR decreased to 44.2% v/s 46.4% in 2QFY16 and 43.5% in 3QFY15....