2QFY2013 Result Update | Banking

November 2, 2012

Union Bank of India

Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT

Source: Company, Angel Research

ACCUMULATE
CMP Target Price
% chg (qoq) 1.6 0.4 8.4 2QFY12 1,661 1,205 353 % chg (yoy) 11.4 5.6 57.3

`223 `235
12 months

2QFY13 1,850 1,273 555

1QFY13 1,822 1,267 512

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Banking 12,291 1.0 274/150 146,064 10 18,755 5,698 UNBK.BO UNBK@IN

During 2QFY2013, UNBK reported a moderate operating profit growth of 5.6% yoy, which was in-line with our estimates. However, the bottom-line grew by a strong 57.3% yoy, which was due to 21.8% yoy decline in provisioning expenses (on account of lower slippages/restructuring and higher recoveries/upgrades). NIMs stable sequentially; NPA levels decline on lower slippages and higher recoveries/upgrades: During 2QFY2013, the banks advance book contracted sequentially by 0.6%, while growth in deposits was subdued at 1.8% qoq. Reduction in lending rates and waiver of processing charges across various home and car loans products, aided its retail loan book to grow at a relatively higher pace of 3.8% qoq. CASA deposits remained flat sequentially. Consequently, the reported CASA ratio declined by 45bp qoq to 30.5%. Reported NIM remained stable qoq at 3.02%, as a 16bp sequential fall in cost of funds was offset by a similar decline in yield on funds. The non-interest income (excl. treasury) grew by 17.5% yoy, largely aided by a robust performance on the fee income front. During 2QFY2013, slippages came in at `792cr (annualized slippage rate of

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 54.4 20.0 10.3 15.4

1.8%) compared to `1,631cr in 1QFY2013 (annualized slippage rate of 3.7%). Incremental slippages were largely granular in nature except for 2 accounts worth `100cr or more. Going forward, the management expects to maintain the quarterly slippage run-rate at levels witnessed in 2QFY2013. Recoveries/upgrades came in higher at `627cr (lumpy to the extent of contribution of ~`200cr from four accounts), compared to `461cr in 1QFY2013. On an absolute basis, gross and net NPA levels declined sequentially by 1.1% and 5.0%, respectively. The bank restructured advances worth `849cr during 2QFY2013 (compared to `1,641 in 1QFY2013). The management expects additional provisioning of `70cr, on account of RBIs 75bp increase in provisioning requirement for standard restructured advances. The management has guided for fresh restructuring of around `3,000cr in the next two quarters.
Outlook and valuation: We remain watchful of the banks performance on the asset quality front, particularly incremental slippages/restructuring and recoveries/upgrades going ahead. The stock has surged significantly (more than 10%) in the last few days and currently trades at valuations of 0.8x FY2014 ABV. We recommend an Accumulate rating on the stock with a target price of `235.

Abs. (%) Sensex UNBK

3m 8.9 28.0

1yr 7.4 (0.9)

3yr 18.0 (14.8)

Key financials (standalone)

Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

FY2011 6,216 48.3 2,082 0.3 3.0 39.6 5.6 1.1 1.0 20.9

FY2012 6,909 11.1 1,787 (14.2) 2.8 32.2 6.9 1.0 0.7 14.8

FY2013E 7,638 10.6 2,237 25.2 2.8 40.4 5.5 0.9 0.8 16.1

FY2014E 8,975 17.5 2,580 15.3 2.9 46.7 4.8 0.8 0.8 16.4

Vaibhav Agrawal
022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com

Varun Varma
022 3935 7800 Ext: 6847 varun.varma@angelbroking.com

Sourabh Taparia
022 3935 7800 Ext: 6872 sourabh.taparia@angelbroking.com

Please refer to important disclosures at the end of this report

Union Bank of India | 2QFY2013 Result Update

Exhibit 1: 2QFY2013 performance (standalone)

Particulars (` cr) Interest earned - on Advances / Bills - on investments - on balance with RBI & others - on others Interest Expended Net Interest Income Other income Other income excl. treasury - Fee Income - Treasury Income - Recov. from written off a/cs - Others Operating income Operating expenses - Employee expenses - Other Opex Pre-provision Profit Provisions & Contingencies - Provisions for NPAs - Provisions for Investments - Other Provisions PBT Provision for Tax PAT Effective Tax Rate (%)
Source: Company, Angel Research

2QFY13 6,110 4,581 1,432 62 35 4,260 1,850 546 471 351 75 56 64 2,396 1,123 679 445 1,273 487 354 (46) 179 786 231 555 29.4

1QFY13 6,070 4,729 1,266 53 22 4,248 1,822 491 436 295 55 58 83 2,313 1,046 679 366 1,267 518 437 49 32 749 237 512 31.7

% chg (qoq) 0.7 (3.1) 13.1 18.0 58.4 0.3 1.6 11.1 7.9 19.0 36.4 (3.4) (23.3) 3.6 7.4 (0.1) 21.3 0.4 (6.1) (19.0) 451.6 5.0 (2.5) 8.4 (226)bp

2QFY12 5,110 3,859 1,141 86 25 3,449 1,661 501 401 298 100 42 61 2,162 957 591 366 1,205 623 495 82 46 582 230 353 39.5

% chg (yoy) 19.6 18.7 25.5 (27.3) 39.4 23.5 11.4 9.0 17.4 17.8 (25.0) 33.3 4.8 10.8 17.4 14.8 21.6 5.6 (21.8) (28.5) 291.0 34.9 0.5 57.3 (1005)bp

1HFY13 12,180 9,310 2,697 115 57 8,508 3,672 1,037 907 646 130 114 147 4,709 2,169 1,358 811 2,540 1,006 791 3 212 1,534 468 1,066 30.5

1HFY12 10,026 7,613 2,204 161 48 6,775 3,251 985 772 550 213 101 121 4,236 1,865 1,183 682 2,371 1,051 860 90 101 1,320 503 817 38.1

% chg (yoy) 21.5 22.3 22.4 (28.5) 19.4 25.6 12.9 5.3 17.5 17.5 (39.0) 12.9 21.6 11.2 16.3 14.8 18.9 7.1 (4.3) (8.0) (96.7) 109.1 16.2 (6.9) 30.5 (759)bp

Exhibit 2: 2QFY2013 Actual vs Estimates

Particulars (` cr) NII Other income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Company, Angel Research

Actual 1,850 546 2,396 1,123 1,273 487 786 231 555

Estimates 1,857 526 2,383 1,099 1,284 591 693 225 468

Var. (%) (0.3) 3.7 0.6 2.2 (0.9) (17.6) 13.4 2.8 18.5

November 2, 2012

Union Bank of India | 2QFY2013 Result Update

Exhibit 3: 2QFY2013 performance analysis (standalone)

Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Savings deposits (` cr) CASA deposits (` cr) Reported CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Yield on funds Cost of funds Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage ratio (%) LLP to avg. assets (%)
Source: Company, Angel Research

2QFY13

1QFY13

% chg (qoq)

2QFY12 % chg (yoy) 17.4 15.6 116bp 4.7 11.5 9.9 (159)bp (115)bp (37)bp (9)bp 13bp (19)bp 262bp 26.0 17bp 20.3 2bp 95bp (304)bp (32)bp

172,901 173,911 226,095 222,110 76.5 15,652 53,311 68,963 30.5 11.4 8.2 9.2 6.4 3.0 46.9 6,470 3.7 3,559 2.1 61.5 1.8 0.5 78.3 18,177 50,565 68,742 30.9 11.6 8.4 9.3 6.5 3.0 45.2 6,541 3.8 3,747 2.2 59.0 3.7 0.7

(0.6) 147,284 1.8 195,572 (183)bp (13.9) 5.4 0.3 (45)bp (25)bp (19)bp (18)bp (16)bp 1bp 166bp (1.1) (10)bp (5.0) (14)bp 245bp (189)bp (13)bp 75.3 14,954 47,800 62,754 32.1 12.5 8.5 9.3 6.3 3.2 44.3 5,136 3.5 2,959 2.0 60.5 4.8 0.9

Advances contract qoq; NIMs stable sequentially

During 2QFY2013, the advance book for the bank contracted sequentially by 0.6% (though higher by 17.4% on a yoy basis). During the quarter, the bank reduced lending rates and waived processing charges, across various home and car loan products, which aided its retail loan book to grow at a relatively higher pace of 3.8% qoq (16.0% yoy). The management has marginally reduced its credit growth guidance for FY2013E to 17% yoy. However, we expect the bank to clock a 12% yoy advance growth for FY2013E, as it has witnessed a sequential contraction in its advance book since March 2012. On the deposits front, the bank witnessed subdued growth of 1.8% qoq. CASA deposits remained flat sequentially, despite healthy growth of 5.4% qoq in saving deposits, as current deposits declined by 13.9% qoq. Consequently, the reported CASA ratio declined sequentially by 45bp to 30.5%. As of 2QFY2013, the share of bulk deposits (incl. CDs) for the bank stood at ~30%. However, the share of high cost deposits was well within the regulatory requirement at ~11.9%. The reported NIM for the bank remained stable qoq at 3.0% as a 16bp sequential fall in cost of funds was offset by a similar decline (18bp qoq) in yield on funds. Yield on investments were higher sequentially by 8bp to 7.37%. Going forward, the management expects the NIM for the bank to stabilize at around 3.0%.

November 2, 2012

Union Bank of India | 2QFY2013 Result Update

Exhibit 4: Advances contraction continues in 2QFY2013

Adv. qoq chg (%) 15.0 10.0 Dep. qoq chg (%) 79.8 78.3 CDR (%, RHS) 82.0 80.0 76.5 78.0 76.0 74.0 72.0

Exhibit 5: CASA ratio declines on a sequential basis

CASA ratio (%) 34.0 33.0 32.0 31.0 30.0 29.0 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 8.0 7.6 8.4 9.6 9.9 10.0 CASA yoy growth (%, RHS) 20.0

13.9 8.5

5.0 -

1.2

6.1 5.0

1.8

75.3

76.1

32.1

32.5

31.3

30.9

(1.8)

(2.2) (0.3)

(5.0)

(0.6)

30.5

2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 6: 18bp qoq lower YoF offsets 16bp qoq fall in CoF...
(%) 10.00 9.62 9.50 9.25 9.71 9.34 9.16

Exhibit 7: ... resulting in sequentially flat NIM

(%) 3.50 3.31 3.30 3.10 2.90 2.70 3.21 3.26 3.01 3.02

9.00

8.50 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

Source: Company, Angel Research

Source: Company, Angel Research

Healthy growth in non-interest income (excl. treasury) aided by robust performance on the fee income front
During 2QFY2013, the bank witnessed a healthy growth of 17.5% yoy on the noninterest income (excluding treasury) front, which was on account of robust growth in income from the commission, exchange and brokerage (CEB) segment and higher recoveries. CEB income grew by 17.8% yoy to `351cr, while recoveries on written off accounts came in higher at `56cr compared to `42cr in 2QFY2012. Treasury income came in lower at `75cr as against `100cr in 2QFY2012. Consequently, the growth in overall other income came in moderate at 9.0% yoy to `546cr.

Exhibit 8: Non-interest income (excl. treasury) higher by 17.5% yoy

Particulars (` cr) CEB Treasury Recoveries Others Other income Other income excl. treasury
Source: Company, Angel Research

2QFY13 1QFY13 351 75 56 64 546 471 295 55 58 83 491 436

% chg (qoq) 2QFY12 19.0 36.4 (3.4) (22.9) 11.2 8.0 298 100 42 61 501 401

% chg (yoy) 17.8 (25.0) 33.3 4.9 9.0 17.5

November 2, 2012

Union Bank of India | 2QFY2013 Result Update

Lower slippages and higher recoveries/upgrades result in sequential reduction in NPA levels during 2QFY2013
During 2QFY2013, the bank witnessed slippages of `792cr (annualized slippage rate of 1.8%) compared to slippages of `1,631cr in 1QFY2013 (annualised slippage rate of 3.7%). Incremental slippages were largely granular in nature except for 2 accounts worth `100cr or more. Going forward, the management expects to maintain the quarterly slippage run-rate at levels witnessed in 2QFY2013. Recoveries/upgrades came in higher during the quarter at `627cr (lumpy to the extent of contribution of ~`200cr from four accounts), compared to `461cr in 1QFY2013 and `232cr in 2QFY2012. Higher recoveries/upgrades coupled with lower slippages, resulted in a sequential decline in gross and net NPA levels, on an absolute basis, by 1.1% and 5.0%, respectively. Gross and net NPA ratios declined on a sequential basis by 10bp and 14bp, to 3.7% and 2.1%, respectively. The management has maintained its guidance for gross NPA ratio below 3.0% by FY2013 end. The provisioning coverage ratio (PCR) for the bank improved sequentially by 245bp to 61.5%. The bank restructured advances worth `849cr during 2QFY2013 (compared to `1,641 in 1QFY2013), thereby taking its outstanding restructured book to `10,009cr. The management expects additional provisioning of `70cr, on account of RBIs 75bp increase in provisioning requirement for standard restructured advances. The banks total exposure to state electricity boards (SEBs) stands at around `10,900cr, of which `3,600cr have been restructured till now. The management has guided for fresh restructuring of around `3,000cr in the next two quarters.

Exhibit 9: Slippages at normalised level in 2QFY2013

6.0 4.5 3.0 1.5 0.9 Slippages (%) 0.7 0.4 0.7 0.5 0.6 Credit cost (%, RHS) 0.9

Exhibit 10: NPA levels decline sequentially

Gross NPAs (%) 4.0 3.0 2.0 60.5 63.1 Net NPAs (%) 62.2 59.0 PCR (%, RHS) 61.5 65.0

60.0

0.3

1.0

55.0

3.5 2.0

3.3 1.9

3.0 1.7

3.8 2.2

4.8

1.5

1.6

3.7

1.8

2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

Source: Company, Angel Research

2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

Source: Company, Angel Research

3.7 2.1
50.0

November 2, 2012

Union Bank of India | 2QFY2013 Result Update

Exhibit 11: 260 branches & 1,426 ATMs added in last one year
Branches 3,400 3,300 3,200 3,100 3,000 2,900 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13
Source: Company, Angel Research

Exhibit 12: Hence, costs ratio higher yoy in 2QFY2013

Cost-to-income ratio (%) Opex to average assets (%, RHS) 1.6 1.6 1.7 2.0 1.6 1.2 0.8 50.0 40.0 30.0 20.0 1.8

ATMs (RHS) 4,185 4,139 3,801

3,025 2,757

4,400 4,100 3,800 3,500 3,200 2,900 2,600 2,300 2,000

1.6

3,051

3,177

3,201

3,239

3,311

44.3

45.9

39.3

45.2

10.0 -

46.9

0.4 -

2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

Source: Company, Angel Research

Investment argument
Incremental slippages/restructuring and recoveries/upgrades remain the key monitorable going ahead
The bank witnessed heavy slippages during the switchover to system based NPA recognition (during 2QFY2012). Although higher recoveries were expected post the complete switchover, the recoveries remained moderate in 2HFY2012. During 1HFY2013, recoveries/upgrades were higher, however the bank once again witnessed higher slippages. Performance on the asset quality front, particularly in terms of incremental slippages/restructuring and recoveries/upgrades, in our view, remain the key monitorable going ahead for the bank.

Outlook and valuation

We remain watchful of the banks performance on the asset quality front, particularly incremental slippages/restructuring and recoveries/upgrades going ahead. The stock has surged significantly (more than 10%) in the last few days and currently trades at valuations of 0.8x FY2014 ABV. We recommend an Accumulate rating on the stock with a target price of `235.

Exhibit 13: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Treasury gain/(loss) (% of investments)
Source: Company, Angel Research

Earlier estimates FY2013 12.0 14.0 30.7 2.8 (4.0) 14.0 10.0 2.8 60.0 FY2014 15.0 17.0 29.8 2.9 14.4 14.0 14.0 2.4 67.5

Revised estimates FY2013 12.0 14.0 30.7 2.8 (2.5) 14.0 12.0 2.7 64.0 FY2014 15.0 17.0 29.8 2.9 12.7 14.0 12.0 2.5 67.5

November 2, 2012

Union Bank of India | 2QFY2013 Result Update

Exhibit 14: Change in estimates

Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT Earlier estimates 7,685 2,239 9,924 4,485 5,438 2,273 3,165 1,027 2,138 FY2013 Revised estimates 7,638 2,273 9,912 4,516 5,396 2,084 3,312 1,075 2,237 % chg (0.6) 1.5 (0.1) 0.7 (0.8) (8.3) 4.6 4.6 4.6 Earlier estimates 9,085 2,561 11,647 5,113 6,533 2,744 3,790 1,230 2,560 FY2014 Revised estimates 8,975 2,561 11,536 5,114 6,422 2,603 3,819 1,239 2,580 % chg (1.2) (0.0) (0.9) 0.0 (1.7) (5.1) 0.8 0.8 0.8

Source: Company, Angel Research

Exhibit 15: P/ABV band

Price (`) 600 500 400 300 200 100 0 0.7x 1x 1.3x 1.6x 1.9x

Oct-06

Oct-07

Oct-08

Oct-09

Oct-10

Oct-11

Source: Company, Angel Research

November 2, 2012

Oct-12

Apr-06

Apr-07

Apr-08

Apr-09

Apr-10

Apr-11

Apr-12

Union Bank of India | 2QFY2013 Result Update

Exhibit 16: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk Reco. Buy Neutral Neutral Buy Accumulate Buy Neutral Reduce Accumulate Neutral Neutral Accumulate Neutral Accumulate Neutral Accumulate Accumulate Neutral Neutral Neutral Accumulate Accumulate Neutral Neutral Accumulate Accumulate Neutral CMP (`) 1,217 475 631 1,079 23 420 138 107 743 283 53 427 71 400 110 96 169 74 1,227 328 756 2,153 121 76 223 65 56 Tgt. price (`) 1,476 1,270 25 492 97 817 449 447 103 181 819 2,353 235 74 Upside (%) 21.3 17.7 6.7 17.3 (9.2) 9.9 5.1 11.9 7.2 7.3 8.4 9.3 5.4 14.6 FY2014E P/ABV (x) 1.6 1.2 3.6 1.7 1.0 2.1 0.6 0.7 0.9 0.7 0.7 0.8 0.7 0.7 0.7 0.6 0.6 0.5 1.1 0.7 0.8 1.4 0.7 0.8 0.8 0.5 0.7 FY2014E Tgt. P/ABV (x) 2.0 2.0 1.1 2.5 0.6 1.0 0.8 0.7 0.7 0.7 0.9 1.5 0.8 0.5 FY2014E P/E (x) 8.8 9.2 17.5 13.0 6.0 9.9 3.7 4.4 5.4 4.4 4.4 5.0 3.4 3.9 4.5 4.4 4.0 3.7 6.4 5.0 4.6 8.3 4.5 4.6 4.8 2.9 4.9 FY2012-14E EPS CAGR (%) 16.0 6.7 27.9 21.7 4.2 23.5 (0.4) 1.0 6.4 16.9 38.9 7.2 100.1 (2.2) 3.1 17.5 2.8 23.0 7.9 29.0 6.8 21.7 11.5 7.9 20.3 20.7 12.1 FY2014E RoA (%) 1.6 1.1 1.9 1.5 0.9 1.5 0.9 0.9 1.0 0.8 0.7 0.9 0.6 0.8 0.8 0.9 1.1 0.6 1.3 0.9 1.0 1.0 0.7 0.6 0.8 0.7 0.5 FY2014E RoE (%) 20.2 13.3 22.0 15.7 16.9 23.5 15.7 15.3 17.0 15.8 16.1 15.3 14.7 15.1 15.9 13.9 16.3 13.1 17.7 14.4 17.3 17.7 16.6 14.4 16.4 16.2 13.0

Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), #Without adjusting for SASF

Company Background
Union Bank of India (UNBK) is the seventh largest public sector bank, with a balance sheet size of almost `2.7lakh cr. The bank has a reasonably large panIndia presence with 3,300+ branches and over 4,100 ATMs. The bank was one of the early adopters of core banking technology amongst PSU banks.

November 2, 2012

Union Bank of India | 2QFY2013 Result Update

Income statement (standalone)

Y/E March (` cr) NII - YoY Growth (%) Other Income - YoY Growth (%) Operating Income - YoY Growth (%) Operating Expenses - YoY Growth (%) Pre - Provision Profit - YoY Growth (%) Prov. & Cont. - YoY Growth (%) Profit Before Tax - YoY Growth (%) Prov. for Taxation - as a % of PBT PAT - YoY Growth (%) FY09 3,814 23.6 1,483 20.3 5,296 22.6 2,214 39.0 3,082 13.1 725 (16.2) 2,357 26.7 630 26.7 1,727 24.5 FY10 4,192 9.9 1,975 33.2 6,167 16.4 2,508 13.3 3,659 18.7 826 13.9 2,833 20.2 758 26.8 2,075 20.2 FY11 6,216 48.3 2,039 3.2 8,255 33.9 3,950 57.5 4,305 17.6 1,350 63.3 2,955 4.3 873 29.6 2,082 0.3 FY12 6,909 11.1 2,332 14.4 9,241 11.9 3,988 0.9 5,254 22.0 2,541 88.3 2,713 (8.2) 926 34.1 1,787 (14.2) FY13E 7,638 10.6 2,273 (2.5) 9,912 7.3 4,516 13.2 5,396 2.7 2,084 (18.0) 3,312 22.1 1,075 32.4 2,237 25.2 FY14E 8,975 17.5 2,561 12.7 11,536 16.4 5,114 13.3 6,422 19.0 2,603 24.9 3,819 15.3 1,239 32.4 2,580 15.3

Balance sheet (standalone)

Y/E March (` cr) Share Capital Reserves & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab & Prov. Total Liabilities Cash balances Bank balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%) FY09 505 8,235 138,703 33.5 3,885 4,890 4,757 160,976 8,992 6,993 42,997 96,534 29.8 2,335 3,124 160,976 29.7 FY10 505 9,919 170,040 22.6 3,125 6,090 5,483 195,162 12,468 3,308 54,404 119,315 23.6 2,305 3,361 195,162 21.2 FY11 635 12,129 202,461 19.1 7,126 6,190 7,443 235,984 17,610 2,488 58,399 150,986 26.5 2,293 4,208 235,984 20.9 FY12 662 13,972 222,869 10.1 11,719 6,190 6,800 262,211 11,634 4,042 62,364 177,882 17.8 2,336 3,955 262,211 11.1 FY13E 662 15,686 254,071 14.0 13,297 6,035 7,756 297,507 11,433 4,586 75,202 199,228 12.0 2,571 4,487 297,507 13.5 FY14E 662 17,679 297,263 17.0 15,458 5,884 8,909 345,855 11,891 5,331 91,407 229,112 15.0 2,899 5,216 345,855 16.3

November 2, 2012

Union Bank of India | 2QFY2013 Result Update

Ratio analysis
Y/E March Profitability ratios (%) NIMs Cost to Income Ratio RoA RoE B/S ratios (%) CASA Ratio Credit/Deposit Ratio CAR - Tier I Asset Quality (%) Gross NPAs Net NPAs Slippages Loan Loss Prov./Avg. Assets Provision Coverage Per Share Data (`) EPS ABVPS DPS Valuation Ratios PER (x) P/ABVPS (x) Dividend Yield DuPont Analysis (%) NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes RoA before pref. div. Pref. div. RoA Leverage (x) RoE 2.7 0.5 2.2 0.2 2.4 0.8 3.2 1.6 1.7 0.4 1.2 1.2 22.5 27.2 2.4 0.5 1.9 0.3 2.2 0.8 3.0 1.4 1.6 0.4 1.2 1.2 22.5 26.2 2.9 0.6 2.3 0.2 2.5 0.7 3.2 1.8 1.4 0.4 1.0 0.0 1.0 21.7 20.9 2.8 1.0 1.8 0.2 1.9 0.8 2.7 1.6 1.1 0.4 0.7 0.0 0.7 20.7 14.8 2.7 0.7 2.0 0.1 2.0 0.8 2.8 1.6 1.2 0.4 0.8 0.0 0.8 20.2 16.1 2.8 0.8 2.0 0.0 2.0 0.8 2.8 1.6 1.2 0.4 0.8 0.0 0.8 20.5 16.4 6.5 1.6 2.2 5.4 1.3 2.5 5.6 1.1 3.6 6.9 1.0 3.6 5.5 0.9 3.6 4.8 0.8 4.0 34.2 139.7 5.0 41.1 173.6 5.5 39.6 203.4 8.0 32.2 217.3 8.0 40.4 246.0 8.0 46.7 285.2 9.0 2.0 0.3 1.6 0.4 83.1 2.2 0.8 1.8 0.4 74.0 2.4 1.2 2.4 0.6 67.6 3.0 1.7 2.5 0.6 62.2 3.8 1.9 2.7 0.6 64.0 4.6 1.9 2.5 0.7 67.5 30.1 69.6 12.0 7.4 31.7 70.2 12.5 7.9 31.8 74.6 13.0 8.7 31.3 79.8 11.9 8.4 30.7 78.4 11.3 8.2 29.8 77.1 10.6 8.0 2.8 41.8 1.2 27.2 2.4 40.7 1.2 26.2 3.0 47.8 1.0 20.9 2.8 43.1 0.7 14.8 2.8 45.6 0.8 16.1 2.9 44.3 0.8 16.4 FY09 FY10 FY11 FY12 FY13E FY14E

November 2, 2012

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Union Bank of India | 2QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

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Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Union Bank of India No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

November 2, 2012

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