Future Growth And Prospects Of Union Bank Of India

I want to know the Future Growth And Prospects of Union Bank of India so can you please tell me?

[shikha]

Union Bank is among the top six public sector banks in India
in terms of its balance sheet size.

Currently it accounts for ~3.5%+ market share in business done by Indian scheduled commercial banks.

The bank with 50%+ of its lending to corporate segment will be a key beneficiary of rising corporate credit demand.

We expect the bank to realize a loan growth of 22% in the current fiscal.

The bank is going strong in its core banking business and has
been growing above industry over the past few years.

Return ratios are very strong with RoE of above 25% and RoA of 1.2%.

Hence, they value the bank at 1.7x FY12E Adj. BV of `
238.7 and arrive at a target price of ` 410, which would give
20% upside and recommend ‘BUY’ rating on the stock.

Key Financials

Year Ended March FY09 FY10 FY11E FY12E
NII 3,813.6 4,192.4 5,802.2 7,092.0
Other Income 1482.6 1974.8 1997.7 2128.6
Net Profit 1,726.5 2,074.9 2,548.7 3,023.0
EPS(`) 34.2 41.1 50.5 59.8

P/E(x) 10.0 8.3 6.8 5.7

P/BV 2.4 2.0 1.6 1.3

ROE 27.2% 26.2% 26.1% 25.4%
ROA 1.2% 1.2% 1.2% 1.2%
ABV per share (`) 137.1 167.9 193.8 238.7