UNION BANK OF INDIA

Fundamental
Analysis
By Group 17

Anushka Ghosh A015 | Harshit Goyal A017 | Lakhabhai Kodiyatar A022

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 Economic Analysis

• GDP: India’s GDP (at constant 2011-12 prices) was estimated at Rs. 33.14 trillion (US$ 452.74
billion) for the second quarter of FY2020-21, against Rs. 35.84 trillion (US$ 489.62 billion) in the
MARKET SIZE second quarter of FY2019-20.

• RATE OF EMPLOYMENT GROWTH: India needs to increase its rate of employment

growth and create 90 million non-farm jobs between 2023 and 2030's, for productivity and economic
growth according to McKinsey Global Institute.

• FOREIGN EXCHANGE RESERVES: India's foreign exchange reserves stood at US$ NEXT
581.131 billion in the week up to December 18, 2020 according to data from RBI.
RECENT DEVELOPMENTS

• India’s overall exports from April 2020 to November 2020

were estimated at US$ 304.25 billion, (a 14.03% decrease
over the same period last year). Overall imports from April With an
2020 to November 2020 were estimated at US$ 290.66 improvement in the
billion, (a 29.96% decrease over the same period last year). economic scenario,
• Gross tax revenue stood at Rs. 7.21 trillion (US$ 98.50 there have been
billion) in the first six months of FY21 investments across
various sectors of
• FDI inflows in India stood at US$ 39.93 billion between
April 2020 and September 2020, 10% higher than the first the economy. 
six months of 2019-20 (US$ 36.05 billion).

• India’s Index of Industrial Production (IIP) for October 2020

stood at 128.5, against 123.2 for September 2020.

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 RECENT DEVELOPMENTS

• Consumer Food Price Index (CFPI) – combined

inflation was 9.43% in November 2020, against
11.07% in October 2020. 
• Consumer Price Index (CPI) – combined inflation
was 6.93% in November 2020, against 7.61% in
October 2020.
• According to IHS Markit, Purchasing Managers'
Index (PMI) for manufacturing stood at 56.4 in
December 2020, against 56.3 in November 2020,
indicating a higher growth for manufacturers
speeding up production and boosting efforts to
rebuild their inventories. 

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Government
Initiatives
• Stimulus package of Rs. 2.65 lakh crore to generate job opportunities.
• Make in India and Digital India. 
• State Highway network and district road network in Andhra Pradesh.
• boost electricity generation capacity in Assam 
• announced various economic packages worth ~Rs. 30 trillion
• developing the oil and gas infrastructure
• to increase public health spending to 2.5% of the GDP 

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Industry Analysis
• 12 Public Sector Banks 

•  22 Private Sector Banks

• 44 Foreign Banks 56 RRB’s

•  1485 Urban Cooperative Banks

• 96,000 Rural Cooperative Banks

Number of ATMs – 2,09,110 (Expected Number of

ATMs by 2021 – 4,07,000)
 PMJDY A/c Reached 40.05 Crore with 1.30 Lakh Crore in Deposits

Credit to non-food industries stood at Rs. 102.80 lakh

crore (US$ 1.38 trillion) as of October 9, 2020.
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Industry Analysis
• The Assets of public sector banks stood at Rs. 107.83 lakh
crore (US$ 1.52 trillion) in FY20.

• Total assets across the banking sector (including public, private

sector and foreign banks) increased to US$ 2.52 trillion in
FY20.

• NPAs (Non-Performing Assets) of commercial banks has

recorded a recovery of Rs. 400,000 crores.

• As per Union Budget 2019-20, investment-driven growth

required access to low cost capital, and this would require
investment of Rs. 20 lakh crore (US$ 286.16 billion) every
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year.
Industry Analysis
• The digital payments revolution will trigger massive changes in the
way credit is disbursed in India. Debit cards have radically replaced
credit cards as the preferred payment mode in India after
demonetization. Payments on Unified Payments Interface (UPI) hit
an all-time high of 1.49 billion in terms of volume with transactions
worth nearly Rs. 2.90 lakh crore (US$ 41.22 billion) in July 2020.

• According to Reserve Bank of India (RBI), India’s foreign exchange

reserve reached US$ 560.53 billion as on October 23, 2020.
According to the Reserve Bank of India (RBI), bank credit and
deposits stood at Rs. 103.43 lakh crore (US$ 1.39 trillion) and Rs.
143.02 lakh crore (US$ 1.92 trillion), respectively, in the fortnight
ending October 9, 2020.
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Company Analysis
About the company

Personal banking Provides products and services in area of saving, deposit, retail loans, cards, insurance, investment and
demat facility.

NRI Banking Under this they offer a range of services and products in areas like remittance, saving, deposit, loans
and payment to their NRI customers.

Corporate Banking The bank offers services like CMS, E-Tax, trade finance, insurance products and loans to their
corporate clients. The overseas offices of the banks are located in Hongkong, Sydney, Abu Dhabi,
Beijing, Shanghai and London.

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 Name Designation

Kewal Handa Non-Executive Chairman

Gopal Singh Gusain Executive Director

Management of
Manas Ranjan Biswal Executive Director

Rajiv Kumar Singh Director

Uttam Kumar Sarkar Shareholder Director

Union Bank Of
M Jayadev Shareholder Director

Arun Kumar Singh Nominee Director

G Rajkiran Rai Managing Director & CEO

India Dinesh Kumar Garg

Birupaksha Mishra

Madhura Swaminathan
Executive Director

Executive Director

Part Time Non-Official Director

K Kadiresan Shareholder Director

Madnesh Kumar Mishra Government Nominee Director

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AMALGAMATION UPDATE

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AMALGAMATION UPDATE - FEATURES

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 Investors Returns (3 years)
Period 6M 1Y 2Y 3Y

Stock (%) 30.65 23.35 -56.06 -63.55

Sector (%) 54.69 66.72 14.26 50.71

Benchmark (%) 28.14 60.45 32.45 51.81

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PERFORMANCE HIGHLIGHTS- Q3FY21

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BUSINESS PERFORMANCE – LIABILITIES

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BUSINESS PERFORMANCE - ASSETS

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 Key Highlights
With a growth in Operating Profit of 12.16%, the company declared Outstanding results in Dec 20

The company has declared positive results for the last 3 consecutive quarters

INTEREST EARNED(HY) At Rs 34,863.49 Crore has Grown at 83.07 %

PAT(HY) Higher at Rs 1,243.46 Crore

GROSS NPA(Q) Lowest at 13.49 %

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 Swot Analysis

01 02 03 04

STRENGTH WEAKNESS OPPORTUNITY THREAT

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DIVERSIFIED LOAN PORTFOLIO – INDUSTRY EXPOSURE

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SEGMENT WISE BREAKUP & RATING OF NBFC- STANDARD EXPOSURE

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COST & YIELD RATIO – GLOBAL (QUATERLY)

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 Union Bank of India Profitability Ratio Analysis
Interest Spread 6.69 6.28 6.18 5.74 5.65

Adjusted Cash -5.85 -6.69 -12.94 2.1 4.45

Margin (%)

Net Profit Margin -7.78 -8.65 -16.02 1.69 4.19

Return on Long 71.1 82.15 72.5 102.85 126.29

Term Fund (%)

Return on Net
Worth (%) -9.46 -12.15 -20.9 2.36 6.65

Adjusted Return -9.46 -12.15 -20.9 2.36 6.65

on Net Worth (%)

Return on Assets
Excluding 89.43 137.56 214.76 340.9 295.44
Revaluations
Return on Assets
Including 98.71 150.24 214.76 340.9 332.99
Revaluations
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 Union Bank of India Management Efficiency Ratio Analysis
Interest Income / 7.16 6.96 6.97 7.64 8.23
Total Funds
Net Interest
Income / Total 2.2 2.09 1.98 2.08 2.13
Funds

Non-Interest
Income / Total 1.01 0.91 1.06 1.16 0.93
Funds
Operating Expense
3.91 3.73 4.08 3.11 2.54
/ Total Funds
Profit Before
Provisions / Total -0.78 -0.8 -1.12 0.08 0.45
Funds
Net Profit / Total
Funds -3.1 -2.94 -3.84 -1.53 -0.65

Loans Turnover 0.12 0.12 0.11 0.12 0.12

Total Income /
Capital Employed 8.18 7.87 8.03 8.8 9.16
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 Union Bank of India Balance Sheet Ratio
Capital Adequacy Ratio 12.81 11.78 11.5 11.79 10.56

Advances / Loans Funds (%) 65.5 65.05 66.09 72.22 73.66

Union Bank of India Debt Coverage Ratio​

Credit Deposit Ratio 70.62 71.04 73.1 76.8 79.29
Investment Deposit Ratio 32.13 30.3 29.98 27.92 27.79
Cash Deposit Ratio 4.72 5.07 4.77 4.46 4.65

Total Debt to Owners

16.44 18.92 18.1 17.91 18.4
Fund

Current Ratio 0.05 0.06 0.05 0.04 0.04

Quick Ratio 26.09 38.98 40.77 35.16 36.65
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NET PROFIT

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EFFICIENCY/ PROFITABILITY RATIOS

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EFFICIENCY RATIOS

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ASSET QUALITY: MOVEMENT IN NON PERFORMING ASSETS

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 Peer Comparison
Company Price % Chg. Market TTM P/B ROE Capital Interest NIM
Name Capitalization PE Adequacy Earned
Ratio
Union Bank 36.45 -1.35 23352.95 - 0.69 -10.16 13.00 37,479.22 2.09

SBI 378.55 -1.39 337841.17 14.57 1.44 8.69 13.00 269,851.6 2.59
6
PNB 39.80 -2.45 41701.18 40.20 0.65 0.74 14.00 54,918.47 2.10
Bank of 78.85 0.00 40776.19 14.85 0.53 1.21 13.00 78,894.70 2.40
Baroda
IOB 16.75 -2.90 27531.96 44.08 1.70 -52.78 11.00 17,406.11 2.03

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Shareholding Pattern
Name December 2020
Promoters
President of India 89.07%
FIIs 0.66%
DIIs
LIC 3.22%
Others 1.36%
Total DIIs 4.58%
Public 5.69%

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 THANK YOU

Anushka Ghosh A015 | Harshit Goyal A017 | Lakhabhai Kodiyatar A022 Group 17