Union Bank Q1 profit seen down 26.4%, NIM may be stable

Union Bank of India's first quarter profitability is expected to contract further as profit may fall 26.4 percent year-on-year to Rs 489 crore (as against 23 percent decline year-on-year in March quarter).

According to a CNBC-TV18 poll, net interest income (the difference between interest earned and interest expended) is seen rising 4 percent to Rs 2,199 crore from Rs 2,117 crore during the same period.

Asset quality of the public sector lender is the key monitorable in June quarter as the management (after Q4FY15 earnings) said they expect slippages to moderate going forward. Slippages in March quarter were Rs 1,547 crore against Rs 1,738 crore in December quarter.

Loan growth is likely to be modest at around 7-8 percent Y-o-Y. Net interest margin is likely to be stable on sequential basis (which was down 9 basis points Q-o-Q to 2.3 percent in Q4FY15).

Other income (non-interest income) may be subdued with growth in single digits of 4-5 percent as fee income is likely to be muted in Q1.