Union Bank of India is doing pretty well today. The stock is currently second top gainer on the BSE, up almost 2.5% at Rs.126 with an intra day high at Rs.128.85.

The stock is up despite its net profit for the Q3FY16 falling from Rs.302 crore to Rs.78 crore, a drop of over 74% (YoY). The NIM fell to 2.31% from 2.57% while NII dropped 6% to Rs.1997 crore.

The market is probably ignoring the profitability and instead celebrating the fact that its asset quality did not slip as much as expected – Gross NPA was at 7.05% v/s 6.12% (QoQ) and Net NPA slipped from 2.95% to 3.39%. The provision coverage ratio actually came down from 57.85% to 55% sequentially.