Union Bank of India is a public-sector bank owned by the Government of India. It offers a variety of banking and financial services across personal, corporate, and international segments.
The market capitalisation of Union Bank as of August 28, 2018 was a little over Rs.10,225 crore.
Company’s Wealth and Recent Performance
- For the quarter ended on June 30, 2018, Union Bank of India reported its Net Interest Income to be at Rs.2,626 crore as against Rs.2,243 crore reported for the same quarter last year. The figure also improved q-o-q by 19.7%.
- The total income for the Q1 FY19 stood at Rs.9,908.7 crore in comparison to Rs.9,567.6 crore stated for the same quarter of the previous fiscal year. Consequently, the operating profit for the period improved marginally y-o-y to stand at Rs.2,088.7 crore.
- The net profit for the June quarter was stated to be at Rs.130 crore as against a net profit of Rs.117 crore reported for the April-June quarter of 2017. The profits were offset by an increase in the provisions for the period.
- The bank’s global business grew by 8.0% y-o-y to Rs.7,24,475 crore. As for its domestic business, it improved by 10.4% y-o-y to Rs.7,00,948 crore as on June 30, 2018. The total deposits of the bank also registered a growth of 8.0% y-o-y.
- Considering the asset quality of the bank, its Gross Non-Performing Assets (NPA) stood 16.00% - an increase of more than 3% y-o-y from 12.63% reported for the same period of the previous financial year. As for its net NPA, it was reported to be at 8.70% for the period as against 7.47% reported a year ago.
Union Bank of India Stock Trends in 2018
- The scrip ended 2017 on a highly bearish note and the stocks continued to head down in 2018 as well. On January 2, 2018, the opening share price of Union Bank of India was Rs.145.10 on the National Stock Exchange. By the end of January, the shares were down by a little over 5% with the closing price on January 31 being Rs.136.25 on the NSE.
- February turned out to be a highly disappointing one for the investors. Over the course of the month, the shares lost a little over 20% driven by uncertainties in the international markets. The stock price of Union Bank of India at the end of February was Rs.105.55. In March, the shares lost another 10% to descend onto the levels at Rs.90. The prices recovered slightly in the final week of the month to close at Rs.94.
- Things didn’t change considerably in the month of April. While the prices rose marginally in the first week of the month to ascend into the Rs.100 region, the shares lost all those gains in the subsequent weeks. A similar trend was seen in May as well, except the share price rose just to cross the Rs.90 mark. The closing share price of Union Bank of India on May 31 was Rs.90.70.
- In the second half of June, the stocks went on to shed more than 10% gradually to descend into the Rs.70 region. In July, the shares hit their 52-week low at Rs.73.90. In August, however, the prices recovered slightly to touch the Rs.90 mark again. As of late August, the shares were seen trading hands at levels above Rs.86.
Union Bank of India Stock Trends in 2016 and 2017
- At the start of 2016, the Union Bank of India shares were seen trading at levels close to Rs.140. Through the months of January and February, the share price lost a little over 20% to touch the Rs.110 mark. However, in March, the stocks managed to recover to end the month on a positive note at Rs.130.
- The stocks were bearish once again in the months of April and May. The scrip gradually moved on to lose its recently made gains to descend below the Rs.110 mark by late May. In the final week of the month, however, the prices recovered slightly to close the month at Rs.118.40.
- In the second half of the year, the stocks were quite bullish. The share price of Union Bank of India rose steadily through the months of June to November to deliver decent returns. In June, the bank announced a final dividend of 19.5%. By mid-July, the shares were trading hands at levels above Rs.130. Things remained this way for most of August as the share price varied from Rs.125 - Rs.140.
- In October, the shares managed to move past the Rs.150 mark, although they failed to find a steady heading at those levels. Up until late November, the share price managed to stay close to the Rs.150 level. However, in December, the shares lost a little over 15% to end the year at Rs.123.10 on the NSE.
- The Union Bank of India shares commenced the year 2017 at levels above Rs.120. By early February, the shares had gained close to 30% to cross the Rs.160 mark. However, owing to the concerns regarding the rising NPAs, the share price went down to its previous levels at Rs.140.
- Through the months of March and April, the stocks moved on to recover their previous losses in a steady manner. By the end of April, the shares had once again managed to touch the Rs.160 mark. This rise was seen through the first week of May as well, with the price crossing the psychologically important mark of Rs.200.
- However, the shares failed to stabilise at those levels and soon, they retreated back into the Rs.100 region. Over the remainder of the month, the share price went down to reach its previous levels at Rs.160. Nonetheless, with respect to the start of the year, the shares were up by a little over 30%.
- For most of June and July, the shares were traded at levels varying from Rs.140 - Rs.160. In August, the shares took a sharp dive and consequently, they were back to their previous levels at Rs.120 - Rs.130. It wasn’t until late October that the share price of Union Bank rose again and this time, it was a dramatic spike.
- In little over a week, the stock price moved up by roughly 50% to touch the Rs.190 mark. In this period, the stocks also touched their 52-week high at Rs.196.05. However, over the remainder of the year, the stocks were bearish and they moved on to lose a little over 20%. The closing price on December 29, 2017, was Rs.144.30.
Should you invest in Union Bank of India?
- Union Bank of India is a public-sector bank owned by the Government of India. It offers an array of banking services and products like loans, accounts, deposits, cards, wealth management, et cetera.
- For the June quarter of the FY 2018-19, the bank reported its net interest income improved by 19.7% q-o-q. As for its net profit for the quarter, it improved by a little over 10% to stand at Rs.130 crore. However, it is worth mentioning that its total provisions and contingencies for the period was reported to be at Rs.2,229 crore as against Rs.1,703.7 crore for the same period, last year.
- This sizeable increase in provisions and contingencies came on the account of double-digit NPAs count. Its Gross NPAs for the quarter were stated to be 16.00% while its Net NPAs were 8.70%. Both these ratios have increased with respect to the figures stated for the Q1 FY18.
- Considering the performance of the bank with respect to its peers, Union Bank is performing relatively better when compared to other banks like the State Bank of India, Punjab National Bank, IDBI Bank and Bank of India. However, all of these banks have reported massive losses.
- Looking at the performance of its stock, the Union Bank shares delivered marginal returns in 2017. For most of 2018, the scrip has been highly bearish and as of late August, it was trading at levels close to Rs.85. While this may serve as an attractive entry point, it is important to note that public-sector banks in India are struggling with their asset qualities. Before investing in this scrip, it is strongly advised that you do your own research before investing.
Union Bank of India is a public-sector bank owned by the Government of India. It offers a variety of banking and financial services and products such as accounts & deposits, loans, wealth management, cards, remittances, et cetera. The bank operates across personal, corporate, and international segments. As of June 30, 2018, the bank has more than 4,200 branches and 12,900 ATMs.
History of the Company
Union Bank of India was registered on November 11, 1919, as a limited company in Mumbai. The head office building of the bank was inaugurated by Mahatma Gandhi in 1921. Up until the Independence of India in 1947, the bank had only four operational branches. Post independence, the bank underwent an exponential growth that witnessed its number of branches increase to more than 230. The Indian Government nationalised the bank in 1969 and the next few decades saw the bank consolidate its position throughout India. In 2002, the bank listed its equity shares on the National Stock Exchange and the Bombay Stock Exchange. The bank subsequently began its international expansion, starting with establishing representative offices in Abu Dhabi, Shanghai, and the UAE.
Management of the Company
Mr. Rajkiran Rai Gundyadka - Managing Director, Chief Executive Officer
Mr. Rajkiran Rai Gundyadka currently serves as the Managing Director and Chief Executive Officer of the Union Bank of India. He has held these positions since July 2017 and is a veteran of the banking industry. He has been a part of this sector for more than three decades and is well-versed in heading finance and regional branches, and zonal offices. He started his career with the Central Bank of India in 1986 as an Agricultural Finance Officer and was associated with the bank for more than 17 years. Over the years, he rose through the ranks to eventually serve as the Field General Manager of Mumbai Zone of Central Bank of India. In addition to his present duties with the Union Bank, he is on the Board of Canara HSBC Oriental Bank of Commerce Life Insurance Co. Limited. He also served as an Executive Director at Oriental Bank of Commerce.
Mr. Raj Kamal Verma - Executive Director
Mr. Raj Kamal Verma presently serves as the Executive Director of Union Bank of India. Prior to his appointment to the current position, he served as the bank’s General Manager. He started his career with the Bank of India as a Probationary Officer. Mr. Verma has been in the banking industry for more than 35 years and is considerably experienced in domestic and international operations. At Bank of India, he served in various capacities like Branch Head, Zonal Manager, and Credit Head. He also served as the bank’s Chief Executive in Kenya and was on the Board of the bank’s subsidiary in Tanzania.
Mr. Atul Kumar Goel - Executive Director
Mr. Atul Kumar Goel is currently an Executive Director of Bank of India. He started his journey in the banking industry with Allahabad Bank in 1992, when he joined as a Chartered Accountant. Over the years, he rose through the ranks and was eventually tasked with a broad spectrum of banking operations at various levels. He moved on to become the General Manager and Chief Finance Officer of Allahabad Bank where he oversaw Joint Ventures, Treasury, and International Banking. He holds a Bachelor’s degree in Commerce and is a member of the Institute of Chartered Accountants of India.
Union Bank of India Listings in NSE, BSE, and Indices
The equity shares of Union Bank of India are available to the general public for trading. These shares are listed on the National Stock Exchange of India Limited and the Stock Exchange, Mumbai. The respective call signs are as follows:
- NSE: UNIONBANK
- BSE: 532477
- ISIN: INE692A01016
- Sector: Banks - Public Sector
Coming to the stock market indices, Union Bank of India does not comprise BSE Sensex or Nifty 50. However, it does form other indices such as:
- Nifty 200
- Nifty 500
- Nifty Full Midcap 100
- Nifty PSU Bank
- Nifty High Beta 50
- S&P BSE 200
- S&P BSE 500
- S&P BSE Dollex - 100
- S&P BSE Finance
- S&P BSE PSU
Union Bank of India
Union Bank Bhavan, 239
Vidhan Bhavan Marg,
Mumbai - 400-021
Contact number: 022-22892000
Stocks vs. Mutual Funds: here's what we recommend
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