Union Bank loses early gains on profit-booking after 90% surge in Q2 net

For the quarter, Union Bank of India also saw it asset quality improve during the quarter, as gross NPAs fell to 6.38 percent, a 96 basis points decline.

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Shares of Union Bank opened 3.15 percent higher but suffered a steep plunge to trade 0.15 percent above the last closing price by 10am on the NSE on October 30. A 90 percent surge in Q2 net profit had triggered the rally in the stock and a subsequent rush to book profit led to the decline.

The stock was trading at Rs 100.05 at the time of filing this story. Union Bank reported a net profit of Rs 3,511 crore for quarter ended September FY24, while its net interest income grew 10 percent on-year to Rs 9,126 crore in the quarter ended September 2023, with a net interest margin expansion of 3 basis points to 3.18 percent.

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For the quarter, Union Bank of India also saw its asset quality improve during the quarter, as gross NPA fell 96 basis points to 6.38 percent, while net NPAs for the same period fell 28 basis points to 1.3 percent. The current account and savings account (CASA) deposits of the bank increased by 4.45 percent on-year to Rs 11.37 lakh crore.

Also read: FD rates: Public sector banks that offer up to 7.25% interest on 3-year deposits

Motilal Oswal has reiterated Union Bank‘s ‘buy’ call with a target price of Rs 125. According to the analysts, Union Bank reported a robust quarter as earnings beat estimates, led by higher treasury gains, healthy margins, and lower provisions. The report added that fresh slippages moderated, which along with healthy recoveries and upgrades, supported the asset quality.

“A low SMA book (0.52 percent) and controlled restructuring (1.7 percent) provide a healthy outlook on asset quality,” the report said.

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