Sunil K. Kajaria UNITED BANK OF INDIA (www.unitedbankofindia.

com)
98300-47514
sunilkajaria@gmail.com

PER SHARE DATA Promoters & Management : UBI is a PSU Bank headquartered in Kolkata. It has a pan-India
CMP 18-Mar-10 68.75 Face Value 10 network of 1505 branches. The East & NE are focus areas for the bank with 973 & 258 branches. 100%
Projected EPS (FY10)* 14.60 Equity (Crs) 316.43 of branches have implemented core banking solution. As of Sep-09, the Deposit base is at 65,000 crs and
Last FY EPS* 11.35 M. Cap(Crs) 2175 Advances is at 41,000 Crs. The current work-force strength is at 16,768 employees. The Govt. of India
Forward P/E 4.71 Dividend (Rs.) 0.00 holds 84.20% of the post-issue share capital of the bank
* based on post-issue capital
KEY FINANCIALS FY10(P) FY09(A) FY08(A) QUARTERLY DATA: Q3FY10(9) Q3FY09(9) H1FY10(6) H1FY09(6) Q1FY10(3) Q1FY09(3)
Total Income 5550 4803 4023 Total Income
Op. Profit (bef. P&C) 758 677 467 Op. Profit (bef. P&C)
PBT 628 418 177 PBT QUARTERLY DATA IS NOT AVAILABLE AS THE BANK
PAT 462 359 145 PAT WAS PREVIOUSLY UNLISTED
OPM(%) 13.66% 14.10% 11.61% OPM(%)
NPM(%) 8.32% 7.47% 3.60% NPM(%)
FINANCIAL ANALYSIS:
1) CASA deposits is at 33.96% of total deposits (savings contributes 26.41%) and cost of funds for fiscal 2009 was 5.78% (PSU Bank average was 6.18%)
2) Share of gross NPA as a % of total advances is at 2.48% as on 30th September 2009. This ratio was at 4.66% on 31st March 2006 and has shown a steady decline
INVESTMENT THESIS
1) UBI has just completed its IPO of 5 Cr Shares agg. 325 Cr. The Bank also expects to receive another 550 Cr. from the Govt. in the form of NCPS (part of Tier I Capital)
2) The stock has listed at a mere 4.17% premium to issue price. As post-listing selling recedes, the stock is expected to out-perform going forward
3) Growth will not be an issue going forward as there exists ample head-room to dilute GoI stake in order to raise more tier-I capital.
4) PSU Bank stock prices have traditionally shown a high co-relation to ABV. H1FY10 numbers indicate that a healthy growth in ABV can be expected for the full year
5) The Stock price has listed at a considerable discount to its post-issue book value of Rs. 90/share. Given its NPA profile, the bank is an Attractive Value Buy at this price.