Page 22 - Banking Finance December 2017

PRESS RELEASE

Union Bank of India posts loss of Rs 1,531 crore in Q2

State-owned Union Bank of India on Friday reported a loss of Rs 1,530.72 crore for the quarter ended September 30, on
account of rising bad loans. The bank had posted a profit of Rs 176.67 crore in the July-September period of previous
fiscal.Total income of the bank rose to Rs 9,439.73 crore during the quarter under review, from Rs 9,347.58 crore over
the same period of 2016-17.

Moody's ups Bank of India, Union Bank, Oriental Bank's outlook to

stable

Citing improved capital buffer following the massive recapitalisation, global rating agency Moody's has revised upwards
credit outlook on Bank of India, Union Bank of India and Oriental Bank of Commerce(OBC) to stable from negative and
also retained these state-run lenders' Baa3 deposits ratings. For Bank of India, Moody's has affirmed the Baa3 rating on
its MTN programme and also the Baa3 ratings on its unsecured debt issued from its London and Jersey branches.
Similarly, for Union Bank, Moody's has affirmed the MTN programme rating at Baa3 and the senior unsecured debt
rating at Baa3 for debt issued from its Hong Kong branch. The agency has also affirmed the standalone credit profiles or
baseline credit assessments of these threebanks at Baa3, Moody's said in a note today. At the same time, it has changed
the outlook to stable from negative for BoI and its London and Jersey branches, Union Bank and its Hong Kong branch,
and also that of Oriental Bank of Commerce.
Moody's cited the massive Rs 2.1 trillion ($32 billion) recapitalisation plan for public sector banks as the main reason for
the changes in the ratings, saying "the quantum of the plan is large enough to help improve the capitalisation levels of
these banks." The additional capital will help the banks take accelerated provisioning for their problem assets, which
will, in turn, improve their capacity to take haircuts on those assets in a resolution process. It will also help them raise
capital from markets that will further support their capitalisation profiles, it said. "The revision in the outlooks for BoI,
Union Bank and OBC's ratings to stable from negative, reflect our view that government's capital infusion plan alleviates
some of the downside risks to their baseline credit assessment and ratings.

Union Bank of India up 3% after inviting bids for sale of NPAs

Union Bank of India was up 3% at around 12:30 PM today after the company invited initial bids from asset reconstruction
companies, banks and non-banking finance companies for the proposed sale of 10 non-performing assets worth Rs 7.21
billion.

Bidders have to complete due diligence on these loans by Nov 10, and the last date of submission of bids is Nov 17. Gross
bad loan ratio of the bank rose to 12.63% as on Jun 30 from 11.17% on Mar 31 and 10.16% a year ago.Union Bank of
India is currently trading at Rs 182.05, up by Rs 5.35 or 3.03% from its previous closing of Rs 176.7 on the BSE.
The scrip opened at Rs 177 and has touched a high and low of Rs 184.8 and Rs 177 respectively. So far 3972032(NSE+BSE)
shares were traded on the counter. The current market cap of the company is Rs 12836.01 crore.Union Bank of India
(UBI) is one of the largest government-owned banks in India (63.44% government stake). The bank's FY17 loan book
stood at Rs.2.9 lac cr. Its FY17 loan mix attributed to retail -15.9%, Agri -16.6%, MSME- 22.8% and medium and large
corporate 44.7%. Also, its GNPA & NNPA for FY17 stood at 11.7% & 6.57% respectively.

22 | 2017 | DECEMBER | BANKING FINANCE

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