Shares of Union Bank of India closed in the green aided by relatively strong performance in Q 4 of last fiscal even as other public sector bank (PSB) stocks in the NSE PSU bank index ended in the red today amidst market carnage.
The stock came close to its 52 week low at one time but once its Q4 numbers were announced, it pulled back and emerged as the only PSB stock in the index to gain.
UBI in the quarter ending March 31, 2015 had posted a net profit of ₹443.77 crore as compared to ₹578.91 crore in the corresponding quarter in the previous year. Total Income went up from ₹ 8,444.95 crore for the quarter ended March 31, 2014 to ₹9,383.71 crore in the fourth quarter of 2014-15. For the full year, the net profit was higher at ₹1,781.64 crore (₹1696.20 crore in the previous fiscal) and the total income jumped from ₹32,170.93 crore in 2013-14 to ₹35, 606.96 crore during 2014-15.
While the Q4 (2014-15) EPS was down to ₹6.98 from ₹9.19 in the same quarter in 2013-14, the full year’s EPS for last year was slightly higher at ₹28.05 as against ₹27.99 in the previous year. The bank hiked the dividend to its shareholders to ₹6 from ₹4/share paid in 2013-14.
Union Bank shares, which opened at ₹140.50 on the NSE dipped to a low of ₹134.25 but recovered to a high of ₹147.60 before closing at ₹142.90, a gain of ₹2.55, on the NSE. The trading/investor interest in the counter was so huge that the stock recorded a trading volume of 1.58 crore shares which was higher than the trading witnessed by three bigger banks- SBI (1.27 crore shares), BoB (1.48 crore shares) and PNB (94.21 lakh shares).
The other stocks in the index ended with losses, including BoB which had performed strongly yesterday after its Q 4 performance brought cheers to the market. Canara Bank was down by ₹13.55 at the close at ₹349, BoB lost ₹12.70 to close at ₹157, OBC closed at ₹186.80, a loss of ₹9.55 and PNB shed ₹6.70 to close at ₹142.40. In fact, PNB touched a new 52 week low of ₹141.70 today.
Commenting on UBI’s last year’s Q 4 show, Vaibhav Agrawal (VP Research – Banking), Angel Broking, Mumbai, said that the bank had reported "mixed set of numbers" for the quarter when PAT de-grew by 23.4 per cent yoy while asset quality improved marginally on qoq basis’. He said the de-growth in PAT was because of tax write back of ₹179.7 crore in 4QFY2014. (The bank’s tax outgo was ₹198.58 crore in Q4 of 2014-15). While the Net Interest Income grew by 3.4 per cent, advances grew by 11.6 per cent yoy.
He said the Gross NPA ratio fell to 4.96 per cent when compared to 5.08 per cent in 3QFY2015. The net NPA declined from 2.95 per cent in 3QFY2015 to 2.71 per cent in the fourth quarter of last fiscal. He recommended a 'buy' rating on the Union Bank stock.