1QFY2014 Result Update | Banking

August 5, 2013

Union Bank of India

Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT 1QFY14 1,909 1,412 560 4QFY13 1,979 1,685 789 % chg (qoq) (3.6) (16.2) (29.0) 1QFY13 1,822 1,267 511 % chg (yoy) 4.8 11.4 9.5

NEUTRAL
CMP Target Price
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 6,971 1.1 288/115 230,667 10 19,164 5,678 UNBK.BO UNBK@IN

`117 -

Source: Company, Angel Research

Union Bank reported a modest operating performance for 1QFY2014. The NII for the bank grew by 4.8% yoy. Non-interest income grew strongly by 54.0% yoy, boosted by treasury gains which grew more than four times to `239cr. Overall, the pre-provisioning profit for the bank grew by 11.4% yoy. During the quarter, the bank continued to witness pressure on the asset quality front and consequently, the provisioning expenses for the bank increased by 31.5%, thereby limiting the bottom-line growth to 9.5% yoy. NIM declines 26bp qoq; Asset quality pressures prevail: During 1QFY2014, the banks advance book grew by a healthy 16.6% yoy, largely driven by strong growth in MSME advances (42.9% yoy) and healthy growth of around 23.2% yoy in both agriculture and retail advances. On the deposits front, the bank witnessed a healthy growth of 22.3% yoy. CASA deposits grew by 15.1% yoy and hence, the CASA ratio declined sequentially by 182bp to 29.0%. The Reported NIM for the bank declined by 26bp to 2.6%, on back of 19bp qoq decline in yield on funds. The bank registered a healthy growth of 18.6% yoy in its non-interest income (excl. treasury), driven by CEB Income growth of 19.3% to `352cr and forex income growth of 43.4% yoy to `119cr. During the quarter, the bank continued to witness pressure on the asset quality front, as addition of stressed assets (slippages and incremental restructuring) remained at elevated levels. Slippages came in at `1,468cr (annualized slippage rate of 2.8%), compared to `875cr (annualized slippage rate of 2.0%) in 4QFY2013. Of the slippages during the quarter, four chunky accounts contributed ~`900cr. The PCR for the bank declined sequentially by 178bp to 63.4%, which resulted in a sequential increase of 15.8% in net NPA levels, higher than the sequential increase of 12.3% witnessed in gross NPA levels. The bank restructured advances worth `1,068cr during 1QFY2014 (as against `1,400cr in 4QFY2013), thereby taking its outstanding restructured book to `13,235cr. The Management has guided for fresh restructuring of ~ `5,000cr in the next quarter (which includes SEB advances worth `2,300cr and advances which are already NPA worth `941cr). Outlook and valuation: Recent RBI liquidity tightening measures amidst an overall weak economic environment clearly suggests that the asset quality pressures for the banking sector are unlikely to abate as quickly as was expected earlier. Overall, we have a cautious view on the sector, with a positive bias towards more retail-oriented banks, on both assets as well as on liabilities. Hence, we recommend a Neutral rating on the stock.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 57.9 17.7 11.7 12.8

Abs. (%) Sensex

Union Bank

3m (2.9) (52.7)

1yr 11.3 (33.0)

3yr 6.0 (63.8)

Key financials (standalone)

Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%) FY2012 6,793 9.3 1,787 (14.2) 2.8 32.2 3.9 0.6 0.7 14.8 FY2013 7,543 11.0 2,158 20.7 2.7 36.0 3.5 0.5 0.7 15.0 FY2014E 8,007 6.2 1,922 (10.9) 2.5 32.0 3.9 0.5 0.6 11.6 FY2015E 9,095 13.6 2,432 26.5 2.5 40.6 3.1 0.4 0.6 13.4

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

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

Harshal Patkar
022 3935 7800 Ext: 6847 harshal.patkar@angelbroking.com

Source: Company, Angel Research; Note: CMP as of August 2, 2013

Please refer to important disclosures at the end of this report

Union Bank of India | 1QFY2014 Result Update

Exhibit 1: 1QFY2014 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

1QFY14 6,857 5,126 1,634 51 46 4,948 1,909 756 517 352 239 46 119 2,665 1,254 790 464 1,412 682 483 41 158 730 170 560 23.3

4QFY13 6,625 5,056 1,495 42 32 4,646 1,979 875 640 433 235 101 106 2,855 1,170 664 506 1,685 656 221 154 281 1,029 240 789 23.3

% chg (qoq) 3.5 1.4 9.3 22.2 43.5 6.5 (3.6) (13.6) (19.2) (18.7) 1.7 (54.2) 11.7 (6.6) 7.1 18.9 (8.4) (16.2) 4.0 118.6 (73.4) (43.8) (29.0) (29.1) (29.0) (1)bp

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 32 748 237 511 31.7

% chg (yoy) 13.0 8.4 29.1 (2.7) 106.6 16.5 4.8 54.0 18.6 19.3 334.5 (20.2) 43.0 15.2 19.9 16.3 26.6 11.4 31.5 10.5 (16.3) 385.2 (2.4) (28.3) 9.5 (838)bp

FY2013 25,125 19,140 5,671 199 115 17,582 7,543 2,552 2,075 1,423 477 324 328 10,095 4,512 2,755 1,757 5,583 2,518 1,565 198 755 3,064 906 2,158 29.6

FY2012 21,088 16,027 4,570 331 161 14,235 6,853 2,388 1,947 1,332 441 353 262 9,241 3,988 2,479 1,508 5,254 2,541 1,511 55 975 2,713 926 1,787 34.1

% chg (yoy) 19.1 19.4 24.1 (40.0) (28.7) 23.5 10.1 6.9 6.6 6.8 8.2 (8.2) 25.1 9.2 13.2 11.1 16.5 6.3 (0.9) 3.6 260.0 (22.5) 13.0 (2.1) 20.7 (454)bp

Exhibit 2: 1QFY2014 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 1,909 756 2,665 1,254 1,412 682 730 170 560

Estimates 2,020 570 2,591 1,209 1,381 537 844 287 557

Var. (%) (5.5) 32.6 2.9 3.7 2.2 26.8 (13.5) (40.7) 0.5

August 5, 2013

Union Bank of India | 1QFY2014 Result Update

Exhibit 3: 1QFY2014 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

1QFY14 198,543 271,558 73.1 21,445 57,663 79,108 29.1 11.1 8.1 8.9 6.4 2.6 47.0 7,093 3.5 3,883 2.0 63.4 2.8 0.6

4QFY13 208,102 263,762 78.9 24,138 57,497 81,635 31.0 11.5 8.2 9.1 6.4 2.9 41.0 6,314 3.0 3,353 1.6 65.2 2.0 0.3

% chg (qoq) (4.6) 3.0 (579)bp (11.2) 0.3 (3.1) (182)bp (31)bp (12)bp (19)bp 4bp (26)bp 604bp 12.3 52bp 15.8 35bp (178)bp 85bp 32bp

1QFY13 170,325 222,110 76.7 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

% chg (yoy) 16.6 22.3 (357)bp 18.0 14.0 15.1 (182)bp (50)bp (25)bp (47)bp (14)bp (38)bp 181bp 8.4 (26)bp 3.6 (24)bp 443bp (85)bp (5)bp

Healthy business growth; NIM declines 6bp sequentially

During 1QFY2014, the banks advance book grew by a healthy 16.6% yoy. Within advances, strong growth was seen in MSME advances, which grew by 42.9% yoy, while both agriculture and retail advances, grew by 23.2% yoy. Going forward, the Management has guided for a credit growth at ~15-16% yoy for FY2014E. On the deposits front, the bank witnessed a healthy growth of 22.3% yoy. CASA deposits grew by 15.1% yoy, on back of a healthy 18.0% yoy growth in current deposits and moderate 14.0% yoy growth in saving deposits. As aggregate deposits growth came in much higher than growth in CASA deposits, CASA ratio declined sequentially by 182bp to 29.0%. As of 1QFY2014, the share of high cost deposits (incl. CDs) to total deposits for the bank stood at 8.0%, as compared to 8.9% witnessed in 4QFY2013 and 16.6% in 1QFY2013. Yield on funds for the bank came off sequentially by 19bp to 8.9%, as the full impact of base rate reduction done in February 2013 was felt in current quarter and also due to higher interest reversals on higher slippages. Cost of funds inched up slightly by 4bp qoq to 6.4%. Consequently, the reported NIM for the bank declined by 26bp to 2.6%.

August 5, 2013

Union Bank of India | 1QFY2014 Result Update

Exhibit 4: Healthy Business growth continues

Adv. yoy chg (%) 30.0 76.7 20.0 77.7 76.5 Dep. yoy chg (%) 78.9 CDR (%, RHS) 80.0 78.0 76.0 73.1 74.0 72.0 70.0 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14
Source: Company, Angel Research

Exhibit 5: CASA ratio declines sequentially

CASA ratio (%) 31.5 31.0 30.5 30.0 29.5 29.0 28.5 28.0 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 9.6 12.0 9.9 10.0 CASA yoy growth (%, RHS) 17.1 20.0 15.1

10.0

17.0 11.5

17.4 15.6

19.0 16.6

17.0 18.3

16.6 22.3

30.9

30.5

31.3

31.0

29.1

Source: Company, Angel Research

Exhibit 6: Yield on funds lower by 19bp sequentially...

(%) 9.50 9.34 9.16 9.00 9.13 9.06 8.87

Exhibit 7: ...hence, NIM declines 26bp qoq

(%) 3.20 3.01 3.00 2.80 2.63 2.60 3.02 2.95 2.89

8.50 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14

2.40 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14

Source: Company, Angel Research

Source: Company, Angel Research

Robust growth in fee income and forex income aids healthy non-interest income (excl. treasury) performance
During 1QFY2014, the bank registered a healthy performance on the non-interest income (excl. treasury) front, with a growth of 18.6% yoy. The CEB Income for the bank grew at a healthy pace of 19.3% yoy to `352cr, while profit on exchange transactions for the bank registered a healthy growth of 43.4% yoy to `119cr. Recoveries from written-off accounts came in at `46cr compared to `58cr in 1QFY2013. Treasury income for the bank came in at `239cr, more than four times as compared to `55cr in 1QFY2013, thereby aiding overall other income to grow strongly by 54.0% yoy to `756cr.

August 5, 2013

Union Bank of India | 1QFY2014 Result Update

Exhibit 8: De-growth in Non-interest income (excl. treasury)

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

1QFY14 4QFY13 352 239 46 119 756 517 433 235 101 106 875 640

% chg (qoq) 1QFY13 (18.7) 1.7 (54.2) 12.3 (13.6) (19.2) 295 55 58 83 491 436

% chg (yoy) 19.3 334.5 (20.2) 43.4 54.0 18.6

Asset quality pressure persists

During the quarter, the bank continued to witness pressure on the asset quality front, as addition of stressed assets (slippages and incremental restructuring) remained at elevated levels. Slippages came in at `1,468cr (annualized slippage rate of 2.8%), compared to `875cr (annualized slippage rate of 2.0%) in 4QFY2013. Of the slippages during the quarter, four chunky accounts contributed ~`900cr. Recoveries/upgrades for the bank came in flat sequentially at `443cr for the quarter. The PCR for the bank declined sequentially by 178bp to 63.4%, which resulted in a sequential increase of 15.8% in net NPA levels, higher than the sequential increase of 12.3% witnessed in gross NPA levels. On relative basis, Gross and net NPA ratios deteriorated sequentially by 52bp and 35bp respectively to 3.5% and 2.0%. The bank restructured advances worth `1,068cr during 1QFY2014 (as against `1,400cr in 4QFY2013) of which ~`715cr was from 6 accounts of Large enterprises. The outstanding restructured book stands at `13,235cr. The Management has guided for fresh restructuring of around `5,000cr in the next quarter (which includes SEB advances worth `2,300cr and advances which are already NPA worth `941cr).

Exhibit 9: Slippages at elevated levels in 1QFY2014

Slippages (%) 4.5 0.7 3.0 0.5 0.8 Credit cost (%, RHS) 0.9 0.6 0.6

Exhibit 10: NPA ratios deteriorate sequentially

Gross NPAs (%) 4.0 3.0 2.0 59.0 61.5 Net NPAs (%) 66.2 65.2 PCR (%, RHS) 70.0 63.4 65.0 60.0 55.0

1.5 0.3

0.3

1.0

3.8 2.2

3.7 2.1

3.4 1.7

3.0 1.6

3.7

1.8

1.5

2.0

2.8

1QFY13 2QFY13 3QFY13 4QFY13 1QFY14

1QFY13 2QFY13 3QFY13 4QFY13 1QFY14

Source: Company, Angel Research

3.5 2.0
50.0

Source: Company, Angel Research

August 5, 2013

Union Bank of India | 1QFY2014 Result Update

Exhibit 11: Steady network expansion continues

Branches 3,700 3,600 3,500 3,400 3,300 3,200 3,100 3,000 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14
Source: Company, Angel Research

Exhibit 12: Cost ratio trends

Cost-to-income ratio (%)
5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000

ATMs (RHS) 5,006 4,603

Opex to average assets (%, RHS) 1.7 1.6 1.6 2.0 1.6 1.2 0.8

50.0 40.0 30.0 20.0

1.6

1.7

4,139

4,185

4,300

3,239

3,311

3,395

3,511

3,604

45.2

46.9

46.3

41.0

10.0 -

47.0

0.4 -

1QFY13 2QFY13 3QFY13 4QFY13 1QFY14

Source: Company, Angel Research

Investment Concerns
Asset quality pressures likely to prevail
In the last two years, the bank has been witnessing heavy accretion to stressed assets (slippages and incremental restructuring taken together) quarter after quarter. Accretion of stressed assets for the bank has remained elevated at an average quarterly run rate of `2,000cr. Though, recoveries/upgrades have also increased, the performance however has remained moderate, so far. Moreover, the Management has guided for elevated level of stressed asset addition in 2QFY2014. Recent macro developments (RBIs liquidity tightening measures) amidst an overall weak economic environment, clearly suggest that the asset quality pressures for the banking sector are unlikely to subside as quickly as was anticipated earlier.

Outlook and valuation

Recent RBI liquidity tightening measures amidst an overall weak economic environment clearly suggests that the asset quality pressures for the banking sector are unlikely to abate as quickly as was expected earlier. Overall, we have a cautious view on the sector, with a positive bias towards the more retail-oriented based banks, on both assets as well as on liabilities. Hence, we recommend a Neutral rating on the stock.

August 5, 2013

Union Bank of India | 1QFY2014 Result Update

Exhibit 13: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages Coverage ratio
Source: Company, Angel Research

Earlier estimates FY2014E 16.0 16.0 30.1 2.6 (0.7) 15.0 12.5 2.0 70.0 FY2015E 16.0 16.0 29.8 2.6 11.7 12.5 12.5 1.9 72.5

Revised estimates FY2014E 8.0 13.0 30.9 2.5 (4.0) 15.0 10.0 2.5 63.5 FY2015E 16.0 16.0 30.6 2.5 10.8 10.0 10.0 2.2 67.0

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 8,567 2,534 11,101 5,145 5,956 2,389 3,567 1,212 2,355 FY2014E Revised estimates 8,007 2,450 10,458 5,101 5,357 2,444 2,912 990 1,922 % chg (6.5) (3.3) (5.8) (0.9) (10.1) 2.3 (18.4) (18.4) (18.4) Earlier estimates 9,714 2,829 12,543 5,788 6,755 2,457 4,298 1,461 2,837 FY2015E Revised estimates 9,095 2,714 11,809 5,611 6,198 2,513 3,685 1,253 2,432 % chg (6.4) (4.1) (5.9) (3.1) (8.2) 2.3 (14.3) (14.3) (14.3)

Source: Company, Angel Research

Exhibit 15: P/ABV band

Price (`) 600 500 400 300 200 100 0 0.65x 0.9x 1.15x 1.4x 1.65x

Dec-07

Aug-09

Mar-09

Dec-12

Apr-06

Apr-11

Jul-07

Jul-12

May-08

Nov-10

Source: Company, Angel Research

August 5, 2013

May-13

Mar-14

Oct-08

Sep-06

Feb-07

Sep-11

Feb-12

Oct-13

Jan-10

Jun-10

Union Bank of India | 1QFY2014 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 Buy Buy Neutral Neutral Neutral Reduce Neutral Neutral Neutral Neutral Reduce Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Accumulate Neutral Neutral Neutral Neutral Neutral CMP (`) 1,104 350 631 887 21 308 67 58 488 170 40 242 57 280 47 60 70 40 1,099 137 524 1,681 75 58 117 33 38 Tgt. price (`) 1,302 745 1,068 51 52 1,930 Upside (%) 18 18 20 (11) (8) 15 FY2015E P/ABV (x) 1.2 0.8 3.0 1.3 0.8 1.3 0.3 0.4 0.5 0.4 0.4 0.4 0.6 0.3 0.3 0.3 0.3 0.3 0.8 0.3 0.5 0.9 0.4 0.5 0.4 0.2 0.4 FY2015E Tgt. P/ABV (x) 1.4 3.5 1.5 0.4 0.5 1.1 FY2015E P/E (x) 7.0 6.7 14.0 9.2 5.0 6.2 2.2 3.5 3.9 2.7 3.1 2.8 3.6 2.9 2.2 2.7 2.1 2.6 5.4 2.2 3.2 5.9 3.2 3.7 2.9 1.7 4.2 FY2013-15E EPS CAGR (%) 19.1 2.9 26.3 15.8 5.7 16.9 12.6 (15.1) 8.3 16.2 10.0 15.4 40.1 2.3 (3.3) 25.1 (4.2) 57.5 (3.5) 17.0 10.8 17.5 (16.0) 66.4 6.2 54.6 (0.4) FY2015E RoA (%) 1.6 1.0 1.9 1.6 0.9 1.3 0.6 0.5 0.8 0.7 0.6 0.8 0.5 0.7 0.6 0.8 0.8 0.5 1.3 0.8 1.0 1.0 0.6 0.6 0.6 0.6 0.4 FY2015E RoE (%) 18.1 12.3 22.8 15.4 16.2 22.8 12.4 10.0 14.2 13.9 15.3 14.2 12.8 13.5 13.2 13.3 12.4 10.5 16.3 12.9 15.7 17.0 12.8 13.5 13.4 14.7 9.8

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 one of the largest public sector banks, with a balance sheet size of over `3.2lakh cr. The bank has a reasonably large pan-India presence with more than 3,600 branches and 5,000 ATMs. The bank was one of the early adopters of core banking technology amongst PSU banks.

August 5, 2013

Union Bank of India | 1QFY2014 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 (%) 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 6,793 9.3 2,448 20.1 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) FY13 7,543 11.0 2,552 4.2 10,095 9.2 4,512 13.2 5,583 6.3 2,518 (0.9) 3,064 13.0 906 29.6 2,158 20.7 FY14E 8,007 6.2 2,450 (4.0) 10,458 3.6 5,101 13.1 5,357 (4.0) 2,444 (2.9) 2,912 (5.0) 990 34.0 1,922 (10.9) FY15E 9,095 13.6 2,714 10.8 11,809 12.9 5,611 10.0 6,198 15.7 2,513 2.8 3,685 26.5 1,253 34.0 2,432 26.5

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 (%) 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 FY13 708 16,588 263,762 18.3 17,007 6,790 7,006 311,861 10,763 5,447 80,830 208,102 17.0 2,479 4,239 311,861 18.9 FY14E 708 18,046 298,051 13.0 19,145 6,620 8,491 351,061 13,412 5,266 100,154 224,750 8.0 2,707 4,772 351,061 12.6 FY15E 708 19,909 345,739 16.0 22,078 6,455 9,958 404,846 15,558 6,073 113,974 260,710 16.0 3,028 5,503 404,846 15.3

August 5, 2013

Union Bank of India | 1QFY2014 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 2.4 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 2.7 1.0 1.7 0.2 1.9 0.8 2.7 1.6 1.1 0.4 0.7 0.0 0.7 20.7 14.8 2.6 0.9 1.8 0.2 1.9 0.7 2.6 1.6 1.1 0.3 0.8 0.0 0.7 20.0 15.0 2.4 0.7 1.7 0.1 1.7 0.7 2.4 1.5 0.9 0.3 0.6 0.0 0.6 20.2 11.6 2.4 0.7 1.7 0.0 1.8 0.7 2.5 1.5 1.0 0.3 0.6 0.0 0.6 20.9 13.4 3.1 0.7 4.4 3.2 0.6 6.3 3.9 0.6 6.3 3.5 0.5 6.3 3.9 0.5 5.1 3.1 0.4 6.3 41.1 173.6 5.5 39.6 203.4 8.0 32.2 217.3 8.0 36.0 247.1 8.0 32.0 262.5 6.5 40.6 298.0 8.0 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 3.0 1.6 2.2 0.5 65.2 4.1 2.1 2.5 0.6 63.5 4.5 1.9 2.2 0.6 67.0 31.7 70.2 12.5 7.9 31.8 74.6 13.0 8.7 31.3 79.8 11.9 8.4 31.0 78.9 11.4 8.2 30.9 75.4 10.8 7.9 30.6 75.4 10.0 7.6 2.4 40.7 1.2 26.2 3.0 47.8 1.0 20.9 2.8 43.1 0.7 14.8 2.7 44.7 0.7 15.0 2.5 48.8 0.6 11.6 2.5 47.5 0.6 13.4 FY10 FY11 FY12 FY13 FY14E FY15E

August 5, 2013

10

Union Bank of India | 1QFY2014 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Pvt. Ltd., its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Pvt. Ltd. or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Pvt. Ltd. has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Pvt. Ltd. endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Pvt. Ltd. and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Pvt. Ltd., nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Ltd. and its affiliates may have investment positions in the stocks recommended in this report.

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%)

August 5, 2013

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