Anand Rathi's research report on Union Bank of India
Strong non-interest income (treasury and recovery) counterbalanced lower margins (due to penal charges reclassification), resulting in Union Bank of India’s decent operating performance and better RoA. Slippages increased on account of one large corporate NPA. Ahead, we expect slippages to ease as most of the stress has been recognised. With stress from the legacy book recognised, the focus now shifts to profitability.
Outlook
We expect the bank to deliver a sustainable, ~1%, RoA in the medium term. We retain our Buy rating, with a 12-mth TP of Rs142, 0.8x P/ABV on the FY27e book.
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