BQ Blue's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BloombergQuint's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Union Bank of India reported healthy earnings, supported by recovery from the Dewan Housing Finance Corporation Ltd. resolution.
Furthermore, fee income trends improved, while domestic margins declined; muted loan growth affected net interest income growth.
On the other hand, asset quality performance was stable despite elevated slippage, largely led by corporate – this includes slippage from SREI Infra (Rs 26 billion).
However, higher write-offs and upgrades aided improvement in asset quality on a sequential basis.
Moreover, Union Bank of India now carries provisions of 65% on SREI Infra (higher versus peers).
The special mention account-II book declined to 2.3% of loans (versus 3.7% of loans in Q1 FY22). Thus, slippage would moderate from FY23 onwards, and credit costs are expected to come in at 2.2%/1.9% for FY22/FY23.
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