Shares of Union Bank of India fell over 2% today, April 24 after the bank reported fourth quarter results on Thursday. The lender posted a 1% de-growth in net interest income while provisions have soared significantly, nearly tripling on a sequential basis to Rs 1,055 crore. Brokerages shared mixed review on the quarterly performance.
Union Bank also declared a dividend of Rs 5 per equity share, which is subjected to statutory and shareholders' approval at the annual general meeting (AGM). The date of AGM and other related details will be informed later.
Union Bank Of India Q4 Results (Standalone, YoY)
Net interest income stood at Rs 9,406 crore compared with Rs 9,514 crore in the year-ago period, down 1% year-on-year.
- Profit after tax came in at Rs 5,316 crore versus Rs 4,985 crore year-on-year, up 7% year-on-year.
- Operating profit at Rs 7,955 crore versus Rs 7,700 crore, up 3% YoY
- Provisions rose to Rs 1,055 crore from Rs 322 crore in the previous quarter, up 227% quarter-on-quarter.
- Gross NPA ratio declined to 2.82% from 3.06%, down 24 basis points quarter-on-quarter.
- Net NPA ratio eased to 0.48% from 0.51%, down 3 basis points quarter-on-quarter.
- Return on assets improved to 1.36% from 1.35%, up 1 basis point quarter-on-quarter.
Kotak Securities has maintained 'Buy' rating on Union Bank at a target price of Rs 210, citing strong quarter and stable asset quality. The target marks 30% upside from the last closing price of Rs 179.7. Meanwhile, UBS reiterated 'Neutral' erating at a target price of Rs 195, an 8.5% upside. The brokerage flagged weak quarter and moderate margins on a sequential basis.
ALSO READ: Union Bank Of India Q4 Result: Shares Decline After Fall In NII And Higher Provision
Kotak Securities on Union Bank
- Kotak Securities maintained 'Buy' rating with target price of Rs 210.
- Union Bank reported strong quarter, but growth versus NIM trade-off intensifies
- The earnings were supported by decline in provisions and NIM remains under pressure
- The lender's asset quality is stable, while credit cost outlook remains benign
- Stock reasonably priced for its return on equity outlook
UBS on Union Bank
- UBS maintained 'Neutral' stance with target price of Rs 195
- Q4 was weak quarter for Union Bank and margins were moderate sequentially
- Profit after tax beat driven by lower opex and provisions, while NII remains weak
- Loan growth picks up sequentially and argins moderates 12 basis points QoQ
- Management expects loan growth improvement, with a focus on profitability.
ALSO READ: Weakness Ahead For India's Tier-1 IT Pack, Even If Q4 Was Strong
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
