Union Bank reported mixed set of numbers for 2QFY2015 with PAT grew by 78.4% yoy, aided by 16.2% de-growth in provisions; however asset quality continue to deteriorate. Advances grew by 9.7% yoy, with NII growth of 6.6% yoy to Rs 20.84 billion. CASA deposits grew by just 6.3% yoy with CASA ratio at 28.7% as on 2QFY2015. Global NIM fell by 7bp qoq to 2.53%, with domestic NIM lower by 8bp qoq to 2.6%.

Commenting on the result, Vaibhav Agrawa, VP research, banking, Angel Broking, said, ''Non-interest income grew by 32.8% yoy, leading to 12.9% yoy growth in Operating Income. PCR fell from 60.4% in 2QFY2014 to 57.97% in the current quarter. Asset quality continues to deteriorate, as its reported Gross NPA ratio was 4.69% for the quarter, as against 4.27% in 1QFY2015 and 3.64% in 2QFY2014. At the CMP, the stock is trading at 0.7x FY2016E ABV. We recommend a Neutral rating on the stock.''

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