Union Bank slips on poor asset quality

Union Bank of India is the top loser on the BSE, currently down 7.5% at Rs.154 levels and to think that on Monday, it had hit a new 52-week high at Rs.172.65.

The market is extremely disappointed with its Q3Fy17 performance, mainly the asset quality for which the market seems to have no tolerance. Gross NPAs rose to 11.70% as on December 31, 2016 as against 10.73% as on September 30, 2016 and 7.05% as on December 31, 2015.  And Net NPA ratio also rose to 6.95% as on December 31, 2016 as against 6.39% as on September 30, 2016 and 4.07% as on December 31, 2015.

In terms of profitability also there was a slip. Net profit dropped to Rs.104 crore v/s Rs.176 crore (YoY).

Provision Coverage Ratio rose marginally to 50.62% v/s 50.45% (QoQ) and up from 55% (YoY).