4QFY2013 Result Update | Banking

May 10, 2013

Union Bank of India

Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT 4QFY13 1,979 1,685 789 3QFY13 1,891 1,358 302 % chg (qoq) 4.7 24.0 161.0 4QFY12 1,821 1,599 773 % chg (yoy) 8.7 5.4 2.1

ACCUMULATE
CMP Target Price
Investment Period

`240 `264
12 months

Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Financial Services 14,296 1.1 288/150 202,283 10 20,083 6,095 UNBK.BO UNBK@IN

Source: Company, Angel Research

Union Bank reported better than expected performance for 4QFY2013. Operating profit grew moderately by 5.4% yoy, as against streets expectation of de-growth. Provisioning expenses grew by 26.8% yoy and resulted in PBT level earnings decline of 4.9% yoy, however, aided by lower effective tax rate of 23.3% for the quarter as against 28.5% in 4QFY2012, the bank reported marginal earnings growth of 2.1% yoy. Healthy business growth; NIM declines 6bp sequentially: During 4QFY2013, the banks advance book grew by a healthy 17.0% yoy. Within advances, strong growth was seen in MSME advances, agriculture advances and retail advances which grew by 46.1%, 29.7% and 21.7% yoy respectively. On the deposits front, the bank witnessed a healthy growth of 18.3% yoy. CASA deposits grew by 17.1% yoy, and the CASA ratio remained stable sequentially at 30.9%. Reported NIM came in marginally lower by 6bp to 2.9%. The bank witnessed an overall decline of 6.4% in the non-interest income (excluding treasury) front, largely on account of a 37.7% yoy decline in the recoveries and also due to lower fee income. The bank continued to witness pressures on the asset quality front, as addition of stressed assets (slippages and incremental restructuring) remained at elevated levels. Slippages came in at `875cr (annualized slippage rate of 2.0%), compared to `677cr (annualized slippage rate of 1.5%) in 3QFY2013. As per the management, incremental slippages were largely granular in nature. PCR declined sequentially by 100bp to 65.2%, which resulted in a sequential increase of 5.8% in net NPA levels, even as gross NPA levels were marginally down sequentially. On relative basis, Gross and net NPA ratios improved by 38bp and 9bp respectively, qoq to 3.0% and 1.6%. The bank restructured advances worth `1,400cr during 4QFY2013 (as against `1,205cr in 3QFY2013), thereby taking its outstanding restructured book to `11,626cr. The management has guided for fresh restructuring of around `2,200cr in the next quarter. Outlook and valuation: We remain watchful of the banks performance on the asset quality front, particularly incremental slippages/restructuring and recoveries/upgrades going ahead as well as the NIMs which have declined in the past two quarters. At the CMP, the stock is trading at valuations of 0.7x FY2015E ABV. Hence, we recommend an Accumulate on the stock with a target price of `264.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 57.9 18.0 10.7 13.4

Abs. (%) Sensex UNBK

3m 3.1 2.9

1yr 22.3 17.9

3yr 15.9 (18.8)

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

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

FY2012 6,909 11.1 1,787 (14.2) 2.8 32.2 7.4 1.1 0.7 14.8

FY2013 7,543 9.2 2,158 20.7 2.7 36.0 6.7 1.0 0.7 15.0

FY2014E 8,673 15.0 2,440 13.0 2.6 40.7 5.9 0.8 0.7 14.6

FY2015E 9,939 14.6 2,885 18.3 2.6 48.2 5.0 0.7 0.7 15.4

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

Akshay Narang
022 3935 7800 Ext: 6829 akshay.narang@angelbroking.com

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

Please refer to important disclosures at the end of this report

Union Bank of India | 4QFY2013 Result Update

Exhibit 1: 4QFY2013 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

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

3QFY13 6,320 4,775 1,478 41 26 4,428 1,891 640 528 344 112 109 75 2,531 1,173 733 440 1,358 857 553 41 263 501 199 302 39.6

% chg (qoq) 4.8 5.9 1.2 2.5 22.9 4.9 4.7 36.9 21.4 25.9 109.8 (7.3) 42.9 12.8 (0.2) (9.4) 15.1 24.0 (23.5) (60.0) 275.6 6.5 105.4 20.7 161.0 (1635)bp

4QFY12 5,688 4,384 1,223 58 23 3,867 1,821 811 684 459 127 162 63 2,632 1,033 595 438 1,599 517 226 (108) 399 1,082 308 773 28.5

% chg (yoy) 16.5 15.3 22.3 (27.4) 40.1 20.1 8.7 7.9 (6.4) (5.7) 85.0 (37.7) 68.3 8.5 13.3 11.7 15.5 5.4 26.8 (2.2) (242.6) (29.7) (4.9) (22.3) 2.1 (522)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: 4QFY2013 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 1,979 875 2,855 1,170 1,685 656 1,029 240 789

Estimates 1,967 711 2,678 1,229 1,449 589 860 273 588

Var. (%) 0.6 23.1 6.6 (4.8) 16.2 11.3 19.6 (12.1) 34.4

May 10, 2013

Union Bank of India | 4QFY2013 Result Update

Exhibit 3: 4QFY2013 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

4QFY13

3QFY13

% chg (qoq)

4QFY12 % chg (yoy) 17.0 18.3 (92)bp 25.2 14.0 17.1 (33)bp (40)bp (14)bp (65)bp (18)bp (37)bp 174bp 15.9 (3)bp 10.9 (9)bp 299bp 36bp (6)bp

208,102 185,885 263,762 239,355 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 77.7 20,331 54,470 74,801 31.3 10.8 7.4 9.1 6.4 3.0 46.3 6,384 3.4 3,169 1.7 66.2 1.5 0.8

12.0 177,882 10.2 222,869 124bp 18.7 5.6 9.1 (30)bp 67bp 83bp (7)bp (4)bp (6)bp (534)bp (1.1) (38)bp 5.8 (9)bp (100)bp 45bp (50)bp 79.8 19,276 50,429 69,705 31.3 11.9 8.4 9.7 6.5 3.3 39.3 5,450 3.0 3,025 1.7 62.2 1.6 0.4

Healthy business growth; NIMs decline 6bp sequentially

During 4QFY2013, the banks advance book grew by a healthy 17.0% yoy. Within advances, strong growth was seen in MSME advances, agriculture advances and retail advances which grew by 46.1%, 29.7% and 21.7% yoy respectively. Going forward, the management has guided for credit growth at ~15-16% yoy for FY2014E. On the deposits front, the bank witnessed a healthy growth of 18.3% yoy. CASA deposits grew by 17.1% yoy, on back of a strong 25.2% yoy growth in current deposits and moderate 14.0% yoy growth in saving deposits. CASA ratio was stable sequentially at 30.9%. As of FY2013, the share of high cost deposits (incl. CDs) to total deposits for the bank have reduced from 16.8% (`37497cr) in FY2012 to 8.9% (`23357cr) in FY2013. Yield on advances for the bank came off sequentially by 16bp, as the bank had reduced lending rates in certain categories of retail, SME and agri advances. Yield on investments remained stable sequentially at 7.3%. Hence, the overall yield on funds was lower marginally by 7bp sequentially. Cost of funds also showed a slight reduction 4bp qoq. The reported NIM for the bank came in marginally lower by 6bp to 2.9%. Going forward, the Management expects the NIMs for the bank to stabilize at around 3.0%.

May 10, 2013

Union Bank of India | 4QFY2013 Result Update

Exhibit 4: Business growth healthy in 4QFY2013

Adv. yoy chg (%) 30.0 79.8 20.0 78.3 76.5 78.9 77.7 Dep. yoy chg (%) CDR (%, RHS) 82.0 80.0 78.0

Exhibit 5: CASA ratio declines sequentially

CASA ratio (%) 34.0 33.0 32.0 31.0 30.0 29.0 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 8.4 9.6 9.9 10.0 12.0 CASA yoy growth (%, RHS) 17.1 20.0

10.0

17.8 10.1

19.5 11.5

17.4 15.6

19.0 16.6

17.0 18.3

31.3

30.9

30.5

31.3

4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

Source: Company, Angel Research

74.0

31.0

76.0

Source: Company, Angel Research

Exhibit 6: 16bp fall in YoA, along with 7bp fall in YoF...

11.40 11.22 11.20 11.06 11.00 10.80 10.60 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 11.11 11.06 10.9

Exhibit 7: ...results in 6bp sequential fall in NIMs

(%) 3.30 3.26

3.10

3.01

3.02 2.95 2.89

2.90

2.70 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

Source: Company, Angel Research

Source: Company, Angel Research

Non-interest income (excl. treasury) recoveries and decline in CEB income

de-grows,

on

lower

During 4QFY2013, the bank witnessed an overall decline of 6.4% in the non-interest income (excluding treasury) front, largely on account of a 37.7% yoy decline in the recoveries to `101cr and also due to a 5.7% yoy decline in fee income from the commission, exchange and brokerage (CEB) segment to `433cr. However, treasury income was up by 85.0% yoy to `235cr, thereby aiding overall other income to grow by moderate 7.9% yoy to `875cr.

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

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

4QFY13 3QFY13 433 235 101 106 875 640 344 112 109 75 640 528

% chg (qoq) 4QFY12 25.9 109.8 (7.3) 41.3 36.7 21.2 459 127 162 63 811 684

% chg (yoy) (5.7) 85.0 (37.7) 68.3 7.9 (6.4)

May 10, 2013

Union Bank of India | 4QFY2013 Result Update

Asset quality pressures 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 `875cr (annualized slippage rate of 2.0%), compared to `677cr (annualized slippage rate of 1.5%) in 3QFY2013. As per the management, incremental slippages were largely granular in nature. Recoveries/upgrades came in at `442cr, marginally lower than `453cr in 3QFY2013. The PCR declined sequentially by 100bp to 65.2%, which resulted in a sequential increase of 5.8% in net NPA levels, even as gross NPA levels were marginally down sequentially. On relative basis, Gross and net NPA ratios improved by 38bp and 9bp respectively, qoq to 3.0% and 1.6%. The bank restructured advances worth `1,400cr during 4QFY2013 (as against `1205cr in 3QFY2013) of which ~1000cr was from 14 accounts of Large enterprises. The outstanding restructured book stands at `11,626cr. The management has guided for fresh restructuring of around `2,200cr in the next quarter.

Exhibit 9: Slippages came in at higher levels

Slippages (%) 4.5 0.7 3.0 0.4 1.5 0.3 0.3 0.5 0.8 0.6 Credit cost (%, RHS) 0.9

Exhibit 10: NPA ratios improve sequentially

Gross NPAs (%) 4.0 3.0 2.0 1.0 62.2 59.0 61.5 Net NPAs (%) 66.2 PCR (%, RHS) 65.2 70.0 65.0 60.0 55.0

3.0 1.7

3.8 2.2

3.7 2.1

3.4 1.7

1.6

3.7

1.8

1.5

2.0

4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

Source: Company, Angel Research

3.0 1.6
50.0

Source: Company, Angel Research

Exhibit 11: Steady network expansion continues

Branches 3,600 3,500 3,400 3,300 3,801 4,139 4,185 4,300 ATMs (RHS) 4,603 5,000 4,500 4,000 3,500

Exhibit 12: Cost-income ratio lowers sequentially

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

3,201

3,239

3,311

3,395

3,511

3,200 3,100 3,000

3,000 2,500 2,000

38.4

45.2

46.9

46.3

10.0 -

41.0

0.4 -

4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

Source: Company, Angel Research

4QFY12 1QFY13 2QFY13 3QFY13 4QFY13

Source: Company, Angel Research

May 10, 2013

Union Bank of India | 4QFY2013 Result Update

Investment argument
Incremental slippages/restructuring and recoveries/upgrades remain the key monitorable going ahead
During the last two years, the bank has witnessed 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, however, the performance has remained moderate, so far. Going forward, the performance on the asset quality front, particularly in terms of slippages/incremental restructuring and recoveries/upgrades, in our view, remains the key monitorable for the bank, in the near term.

Outlook and valuation

We remain watchful of the banks performance on the asset quality front, particularly incremental slippages/restructuring and recoveries/upgrades going ahead. At the CMP, the stock is trading at valuations of 0.7x FY2015E ABV. Hence, we recommend an Accumulate on the stock with a target price of `264.

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 15.0 16.0 30.2 2.7 6.9 12.5 12.5 2.1 72.5 FY2015E 16.0 16.0 29.9 2.7 10.6 12.5 12.5 2.1 75.0

Revised estimates FY2014E 16.0 16.0 30.1 2.6 0.1 15.0 12.5 2.0 70.0 FY2015E 16.0 16.0 29.8 2.6 11.7 12.5 12.5 2.0 72.5

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 8,673 2,554 11,226 5,142 6,085 2,362 3,723 1,265 2,457 FY2014E Revised estimates 8,673 2,556 11,229 5,145 6,084 2,389 3,696 1,256 2,440 % chg 0.0 0.1 0.0 0.1 (0.0) 1.1 (0.7) (0.7) (0.7) Earlier estimates 9,944 2,825 12,769 5,785 6,984 2,643 4,341 1,476 2,866 FY2015E Revised estimates 9,939 2,854 12,794 5,788 7,006 2,635 4,370 1,485 2,885 % chg (0.0) 1.0 0.2 0.1 0.3 (0.3) 0.7 0.7 0.7

Source: Company, Angel Research

May 10, 2013

Union Bank of India | 4QFY2013 Result Update

Exhibit 15: P/ABV band

Price (`) 600 500 400 300 200 100 0
Oct-08 Feb-07 Nov-10 May-08 Feb-12 Sep-06 Sep-11 May-13 Dec-07 Aug-09 Mar-09 Dec-12 Oct-13 Apr-06 Jan-10 Jun-10 Apr-11 Jul-07 Jul-12 Mar-14

0.7x

1x

1.3x

1.6x

1.9x

Source: Company, Angel Research

May 10, 2013

Union Bank of India | 4QFY2013 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 Neutral Neutral Buy Neutral Buy Accumulate Neutral Accumulate Neutral Accumulate Neutral Neutral Buy Neutral Neutral Accumulate Buy Accumulate Neutral Neutral Accumulate Accumulate Neutral CMP (`) 1,468 456 703 1,166 24 509 123 91 705 337 57 423 72 406 93 88 160 63 1,361 259 771 2,294 128 74 240 60 53 Tgt. price (`) 1,714 1,357 142 815 360 461 453 186 282 945 2,572 264 64 Upside (%) 16.7 16.4 15.1 15.6 6.8 8.9 11.6 16.0 9.2 22.6 12.2 10.3 6.9 FY2015E P/ABV (x) 1.6 1.0 3.3 1.7 0.9 2.2 0.5 0.6 0.7 0.7 0.6 0.7 0.6 0.5 0.5 0.5 0.5 0.4 1.0 0.5 0.7 1.3 0.6 0.8 0.7 0.4 0.6 FY2015E Tgt. P/ABV (x) 1.9 2.0 0.6 0.9 0.8 0.8 0.6 0.6 0.6 0.9 1.4 0.8 0.4 FY2015E P/E (x) 9.6 7.7 16.5 12.1 5.3 10.6 3.4 3.9 4.9 4.9 4.3 4.9 4.0 3.8 3.5 4.7 3.8 3.1 6.8 4.1 4.4 8.2 4.5 5.1 5.0 2.9 4.8 FY2013-15E EPS CAGR (%) 17.3 10.0 22.8 15.5 11.4 14.9 12.6 4.2 17.0 21.8 14.8 14.0 42.8 8.3 4.3 15.2 6.5 53.3 (5.2) 17.5 12.4 16.4 (3.5) 36.9 21.2 40.4 21.2 FY2015E RoA (%) 1.6 1.2 1.8 1.5 1.0 1.3 0.8 0.8 1.0 0.8 0.6 0.8 0.6 0.8 0.8 0.7 1.0 0.7 1.2 0.8 1.0 1.0 0.7 0.6 0.8 0.7 0.5 FY2015E RoE (%) 17.6 13.7 21.8 15.6 17.1 22.1 14.2 13.4 16.0 15.1 15.6 14.1 13.3 14.4 15.3 11.3 14.9 13.1 16.0 13.1 16.3 17.0 15.2 12.6 15.3 14.7 11.7

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 `3.1lakh cr. The bank has a reasonably large pan-India presence with more than 3,500 branches and 4,600 ATMs. The bank was one of the early adopters of core banking technology amongst PSU banks.

May 10, 2013

Union Bank of India | 4QFY2013 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 6,909 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) FY13 7,543 9.2 2,552 9.4 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 8,673 15.0 2,556 0.1 11,229 11.2 5,145 14.0 6,084 9.0 2,389 (5.2) 3,696 20.6 1,256 34.0 2,440 13.0 FY15E 9,939 14.6 2,854 11.7 12,794 13.9 5,788 12.5 7,006 15.1 2,635 10.3 4,370 18.3 1,485 34.0 2,885 18.3

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 (%) 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 17,762 6,035 7,006 311,861 10,763 5,447 80,830 208,102 17.0 2,479 4,239 311,861 18.9 FY14E 708 18,462 305,963 16.0 20,477 5,884 8,039 359,534 13,768 5,393 91,315 241,399 16.0 2,772 4,887 359,534 15.3 FY15E 708 20,677 354,918 16.0 23,642 5,737 9,426 415,108 15,971 6,227 104,141 280,022 16.0 3,105 5,642 415,108 15.5

May 10, 2013

Union Bank of India | 4QFY2013 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 2.8 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 2.6 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 2.6 0.7 1.9 0.1 1.9 0.7 2.6 1.5 1.1 0.4 0.7 0.0 0.7 20.2 14.6 2.6 0.7 1.9 0.1 1.9 0.7 2.6 1.5 1.1 0.4 0.7 0.0 0.7 20.8 15.4 5.8 1.4 2.3 6.1 1.2 3.3 7.4 1.1 3.3 6.7 1.0 3.3 5.9 0.8 3.3 5.0 0.7 4.0 41.1 173.6 5.5 39.6 203.4 8.0 32.2 217.3 8.0 36.0 246.4 8.0 40.7 283.8 8.0 48.2 324.8 9.5 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 3.5 1.5 2.0 0.6 70.0 4.0 1.4 2.0 0.6 72.5 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 11.3 8.3 30.1 78.9 10.6 8.0 29.8 78.9 10.1 7.8 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 2.6 45.8 0.7 14.6 2.6 45.2 0.7 15.4 FY10 FY11 FY12 FY13 FY14E FY15E

May 10, 2013

10

Union Bank of India | 4QFY2013 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 Limited, 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 Limited 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 Limited 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 Limited 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 Limited 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 Limited, 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 Limited 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%)

May 10, 2013

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