Union Bank of India is amongst the top three losers on the BSE currently. The stock price slipped over 3% intra day, to the low point at Rs.181 and is now at Rs.182 levels.

The market is not enthused with the Bank’s performance for Q4FY17. Despite other income bolstering its net profit, the Bank missed all profit estimates. It showed a 12.5% (YoY) surge in net profit at Rs.108 crore and this was mainly on account of exceptional income on account of tax write back, added into other income, which was up 45% at Rs.1446 crore.

On the other hand, the stock did not crash as much because it has improved its asset quality. Gross NPA improved from 11.7 % to 11.7% and Net NPA too bettered from 6.95% to 6.57%. But provisioning remained high at Rs.2444 crore v/s Rs.1670 crore in Q3 and Rs.1565 crore on YoY. Slippages have come down 10% (QoQ) at Rs.2951 crore.

For the current fiscal, the Bank has set itself a target of bringing down the Gross NPA to 10.75%, improve its deposit book by 6-8%, loan book by 8-10% and increase its provision coverage ratio from current 51.41% to 55%.