 "Union Bank of India falls on asset quality concerns")
Union Bank of India was trading 5% lower at Rs 130 on the BSE as the bank's asset quality worsened in the April-June quarter (Q1FY17) with gross non-performing assets (NPAs) doubling to 10.16% from 5.53% in the year-ago period. It was 8.70% as on March 31, 2016.
Net NPAs stood at 6.16% as on June 2016 as against 5.25% in March 2016 and 3.08% in June 2015, Union Bank of India said in a press release.
The state-owned bank reported 68% year-on-year (YoY) fall in net profit to Rs 166 crore in Q1FY17, on higher provisions for bad loans. The bank had reported a profit Rs 519 crore in the same period last year.
The provision for bad loans more than doubled to Rs 1,353 crore in the quarter from Rs 642 crore in the same period last year.
“On the business front the bank continued to disappoint with advances and deposits growing by 3.5% each. The capital adequacy ratio (CAR) of the bank remains weak at 10.75%, while the Governments infusion of Rs 721 crore will help to some extent, however we feel the NNPAs of 6.16% indicates lot of provisioning is to be done in the quarters to come, we don’t expect material change in the earnings due to the above factors,” Angel Broking said in a client note.
The stock hit a low of Rs 127 on the BSE in intra-day trade. The counter has seen huge trading volumes with a combined 8.63 million shares changed hands on the BSE and NSE till 11:03 am.
Net NPAs stood at 6.16% as on June 2016 as against 5.25% in March 2016 and 3.08% in June 2015, Union Bank of India said in a press release.
The state-owned bank reported 68% year-on-year (YoY) fall in net profit to Rs 166 crore in Q1FY17, on higher provisions for bad loans. The bank had reported a profit Rs 519 crore in the same period last year.
The provision for bad loans more than doubled to Rs 1,353 crore in the quarter from Rs 642 crore in the same period last year.
“On the business front the bank continued to disappoint with advances and deposits growing by 3.5% each. The capital adequacy ratio (CAR) of the bank remains weak at 10.75%, while the Governments infusion of Rs 721 crore will help to some extent, however we feel the NNPAs of 6.16% indicates lot of provisioning is to be done in the quarters to come, we don’t expect material change in the earnings due to the above factors,” Angel Broking said in a client note.
The stock hit a low of Rs 127 on the BSE in intra-day trade. The counter has seen huge trading volumes with a combined 8.63 million shares changed hands on the BSE and NSE till 11:03 am.