Union Bank Of India Q1 Review - Operating Performance Showing Recovery Signs: Motilal Oswal
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Motilal Oswal Report
Union Bank of India reported healthy operating performance, supported by higher other income and improving margin trajectory, despite sluggish business growth.
Domestic net interest margin expanded by 71 basis points QoQ to 3.11%.
Slippages stood elevated (~4.8% annualised), led by higher slippages in the micro, small and medium enterprise and two large corporate accounts slipping in Q1 FY22.
However, higher write-offs and upgradations aided Union Bank of India's stable asset quality on a sequential basis.
Special mention account-II overdue stood at 3.7% of loans, and restructured book stood at 2.7% of net loans.
We conservatively estimate return on asset/return on equity of 0.6%/11.4% by FY23E.
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