Motilal Oswal's research report on Union Bank of India
Union Bank of India (UNBK) reported 19% YoY growth in PAT at INR33b (14% miss) in 4QFY24 as opex increased 13.7% YoY to INR76b (24% higher than MOFSLe). NII grew 14.4% YoY to INR94.4b (in line). NIMs stood broadly stable, with a 1bp QoQ increase to 3.09%.Loan book grew 14% YoY/1% QoQ. Deposits grew 9.3% YoY/4.2% QoQ. The CD ratio, thus, moderated 224bp QoQ to 71.3%.Asset quality ratios improved slightly, with GNPA/NNPA ratios declining by 7bp/5bp YoY to 4.76% /1.03%. However, slippages increased during the quarter to INR33b from INR26.8b in 3QFY24.
Outlook
We cut our FY25/FY26 EPS estimates by 2.1-2.2% and estimate RoA/RoE of 1.1%/16.3% by FY26. Retain BUY with a revised TP of INR165.
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