CARE maintains fundamental grade of 4/5 on United Bank

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CARE maintains fundamental grade of 4/5 on United Bank

CARE Research has come out with its report on United Bank of India (UBI). The research firm has assigned a valuation grade of 5/5 and fundamental grade of "4/5" to the company, in its August 16, 2011 report.

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CARE Research has come out with its report on United Bank of India (UBI). The research firm has assigned a valuation grade of 5/5 and fundamental grade of "4/5" to the company, in its August 16, 2011 report.

Sustained growth in business
The total business for UBI stood at Rs.130,201 crore as on 30th June 2011 - up 17 per cent as against that on 30th June 2010. The advances grew by 19 per cent and stood at Rs.53,097 crore at the end of 30th June 2011. The deposits on the other hand grew by 15.6 per cent to Rs.77,104 crore.

Healthy share of CASA in deposit mix
CASA deposits for UBI stood at Rs.31,034 crore - up 18.3 per cent y-o-y, vis-a-vis a deposits growth of 15.6 per cent. Subsequently, share of CASA in UBI's deposits grew from 39.3 per cent as on 30th June 2010 to 40.2 per cent as on 30th June 2011. Also, the bank has reduced its dependence on bulk deposits, share of which came down 26.6 per cent as on 30th June 2010 to 21.5 per cent as on 30th June 2011.

GNPA Ratio at 2.89 per cent; NNPA Ratio at 1.67 per cent
The GNPA ratio as on 30th June 2011, stood at 2.89 per cent as against 3.19 per cent on 30th June 2010. NPA levels continue to be a key monitorable in maintaining the fundamentals for UBI.

Valuation
The CARE Equity Research assigns valuation grade of 5/5 to United Bank of India (UBI) based on the Current Intrinsic Value (CIV) of Rs.115 as against Current Market Price (CMP) of Rs.86, indicating that shares of UBI have 'Considerable Upside Potential', says CARE Equity Research report

Disclaimer: This report is prepared by CARE Research, a division of Credit Analysis & REsearch Limited [CARE]. CARE Research has taken utmost care to ensure accuracy and objectivity while developing this report based on information available in public domain or from sources considered reliable. However, neither the accuracy nor completeness of information contained in this report is guaranteed. CARE Research operates independently of ratings division and this report does not contain any confidential information obtained by ratings division, which they may have obtained in the regular course of operations. Opinions expressed herein are our current opinions as on the date of this report.

CARE's valuation of the security is mainly based on company specific fundamental factors. Equity prices are affected by both fundamental factors as well as market factors such as - liquidity, sentiment, broad market direction etc. The impact of market factors can distort the price of the security thereby deviating from the intrinsic value for extended period of time. This report should not be construed as recommendation to buy, sell or hold a security or any advice or any solicitation, whatsoever. It is also not a comment on the suitability of the investment to the reader. The subscriber / user assumes the entire risk of any use made of this report or data herein. CARE specifically states that it or any of its divisions or employees have no financial liabilities whatsoever to the subscribers / users of this report. This report is for personal information only of the authorised recipient in India only. This report or part of it should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person, especially outside India or published or copied for any purpose.

To read the full report click on the attachment