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2QFY2012 Result Update | Banking

November 2, 2011

United Bank of India


Performance Highlights

Particulars (` cr) NII Pre-prov. profit PAT


Source: Company, Angel Research;

BUY
CMP Target Price
% chg (qoq) 9.6 7.9 (5.8) 2QFY11 526 355 110 % chg (yoy) 18.5 27.0 13.7

`71 `82
12 months

2QFY12 624 450 125

1QFY12 569 417 132

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Banking 2,447 0.8 137/70 58,254 10 16,858 5,073 UBOI.BO UNTDB@IN

For 2QFY2012, United Bank registered 13.7% yoy growth in its net profit to `125cr, above our estimates due to higher non-interest income than estimated by us. We recommend a Buy rating on the stock.
Chunky slippages witnessed during 2QFY2012; NIM improves sequentially: For 2QFY2012, the banks advances grew by 3.2% qoq to `54,304cr, while deposits declined by 1.5% qoq to `78,244cr. Savings deposit growth grew by 2.4% qoq; however, current deposits declined by 5.8% qoq, leading to a dip of 37bp in CASA ratio to 39.9% (40.2% as of 1QFY2012). During the quarter, with rising cost of deposits for the system as a whole, the banks cost of deposits increased by 25bp qoq to 6.6%. However, the bank was able to increase its yield on advances by 54bp qoq, leading to a sequential expansion of 14bp in reported NIM. Non-interest income declined by 4.6% qoq (up 6.9% yoy) to `162cr, mainly due to a sequential 29.0% decline in treasury income to `47cr. Income from recoveries was also poor, declining by 19.1% qoq to `16cr. The bank switched over accounts worth `5lakhs and below to system-based NPA recognition in 2QFY2012. Management indicated that the switchover did not have any material impact on the asset quality and higher slippages witnessed during the quarter were due to three large corporate accounts (~`314cr out of total `621cr slippages), which became non-performing during 2QFY2012. Consequently, gross NPA ratio and net NPA ratio deteriorated to 3.5% and 2.2% in 2QFY2012 from 2.9% and 1.7% in 1QFY2012, respectively. Outlook and valuation: UBI has a favorable deposit franchise, as reflected in its strong CASA ratio of 39.9% as of 2QFY2012. At the CMP, the stock is trading at P/ABV multiple of 0.6x FY2013E P/ABV. We have assigned a target FY2013E P/ABV multiple of 0.7x and, hence, we recommend a Buy rating on the stock with a target price of `82.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 85.5 2.2 1.1 11.3

Abs. (%) Sensex UBI*

3m (3.6) (22.5)

1yr (14.2) (45.1)

3yr 78.4 -

*Note: Listed in March, 2010

Key financials
Y/E March (` cr) NII % chg Net profit available to eq. shareholders % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

FY2010 1,391 19.8 305 166.1 2.1 9.6 7.4 0.8 0.5 11.6

FY2011 2,169 55.9 457 49.7 2.7 13.3 5.4 0.7 0.6 14.1

FY2012E 2,493 14.9 517 13.1 2.7 15.0 4.7 0.6 0.6 13.7

FY2013E 2,785 11.7 588 13.7 2.7 17.1 4.2 0.6 0.6 14.1

Vaibhav Agrawal
022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com

Shrinivas Bhutda
022 3935 7800 Ext: 6845 shrinivas.bhutda@angelbroking.com

Varun Varma
022 3935 7800 Ext: 6847 varun.varma@angelbroking.com

Please refer to important disclosures at the end of this report

United Bank of India | 2QFY2012 Result Update

Exhibit 1: 2QFY2012 performance


Particulars (` cr)
Interest earned - on Advances / Bills - on investments - on balance with RBI & others - on others Interest Expended Net Interest Income Other income Other income excl. treasury - Fee Income - Treasury Income - Recoveries from writ.-off acc - Others Operating income Operating expenses - Employee expenses - Other Opex Pre-provision Profit Provisions & Contingencies - Provisions for NPAs

2QFY12 1QFY12 % chg (qoq) 2QFY11 % chg (yoy) 1,940 1,467 463 5 5 1,316 624 162 115 44 47 16 55 786 335 217 118 450 260 137 122 191 66 125
34.6

1,838 1,394 443 2 1,269 569 170 103 45 67 20 38 739 322 215 107 417 218 118 100 199 67 132
33.6

5.5 5.2 4.6 191.1 3.7 9.6 (4.6) 11.1 (3.5) (29.0) (19.1) 44.2 6.3 4.2 1.3 10.1 7.9 19.2 16.4 22.5 (4.4) (1.5) (5.8)
100bp

1,506 1,094 412 0 980 526 152 100 43 51 17 40 678 323 211 112 355 218 170 48 137 27 110
19.7

28.8 34.1 12.6 1,244.1 34.3 18.5 6.9 14.3 1.1 (7.7) (7.1) 37.8 15.9 3.7 3.0 4.9 27.0 19.2 (19.3) 156.1 39.5 144.4 13.7
1485bp

- Other Provisions
PBT Provision for Tax PAT Effective Tax Rate (%) Source: Company, Angel Research

Exhibit 2: 2QFY2012 Actual vs. Angel estimates


Particulars (` cr) Net interest income Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Company, Angel Research

Actual 624 162 786 335 450 260 191 66 125

Estimates 570 122 691 356 335 178 157 47 110

% chg 9.5 33.2 13.7 (5.9) 34.5 45.9 21.4 40.0 13.5

November 2, 2011

United Bank of India | 2QFY2012 Result Update

Exhibit 3: 2QFY2012 performance


Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Cost of deposits Yield on advances Yield on investments Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage ratio (%) NPA to avg. assets (%)
Source: Company, Angel Research

2QFY12 1QFY12 %chg (qoq) 2QFY11 54,304 78,244 69.4 6,513 24,693 31,206 39.9 13.0 8.9 6.6 11.7 7.8 3.2 42.7 1,908 3.5 1,202 2.2 65.0 4.6 0.6 52,607 77,104 68.2 6,914 24,120 31,034 40.2 13.2 9.1 6.4 11.2 7.8 3.0 43.5 1,535 2.9 878 1.7 70.2 2.9 0.5 3.2 1.5 117bp (5.8) 2.4 0.6 (37)bp (28)bp (17)bp 25bp 54bp 2bp 14bp (85)bp 24.3 59bp 36.9 54bp (524)bp 171bp 8bp 46,277 69,046 67.0 5,578 21,834 27,412 39.7 12.7 8.4 5.6 9.9 7.8 3.1 47.7 1,460 3.1 729 1.6 71.8 1.9 0.9

%chg (yoy) 17.3 13.3 238bp 16.8 13.1 13.8 18bp 21bp 53bp 106bp 180bp 3bp 11bp (503)bp 30.7 36bp 64.8 63bp (677)bp 272bp (26)bp

Loan book growth strong in 2QFY2012


For 2QFY2012, the banks advances grew by 3.2% qoq to `54,304cr, while deposits declined by 1.5% qoq to 78,244cr. On an annualized basis, healthy growth of 33.6% in corporate loan book and 30.5% in agriculture loon book were witnessed in 2QFY2012. Bulk deposits as of 2QFY2012 stood at 19.3% (down from 23.0% in 2QFY2011). Savings deposit grew by 2.4% qoq; however, current deposits declined by 5.8% qoq, leading to a dip of 37bp in CASA ratio to 39.9% (40.2% as of 1QFY2012). During 1QFY2012, the bank has secured a mandate from the West Bengal State Government for opening accounts for disbursal of salaries. The exercise of opening these accounts, which was slated to start from September 2011, is expected to sustain the CASA ratio for the bank at near 40% levels.

November 2, 2011

United Bank of India | 2QFY2012 Result Update

Exhibit 4: Advances growth strong during 2QFY2012


Adv. qoq chg (%) 12.0 10.0 8.0 6.0 4.0 2.0 (2.0) (4.0) 69.3 Dep. qoq chg (%) 68.7 CDR (%, RHS) 69.4 68.2 68.0 70.0

Exhibit 5: CASA ratio falls below 40%


CASA ratio 41.0 40.5 40.0 24.7 29.4 22.2 18.3 13.8 CASA yoy growth (%, RHS) 35.0 30.0 25.0 20.0 15.0 10.0 5.0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12
Source: Company, Angel Research

67.0

3.7 3.5

9.5 5.9

5.6 6.5

3.2 1.5

66.0

39.7

40.2

40.8

40.2

(1.7) (1.0)

64.0

39.0

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12


Source: Company, Angel Research

NIM expands by 14bp qoq on the back of better yields


During the quarter, with rising cost of deposits for the system as a whole, the banks cost of deposits increased by 25bp qoq to 6.6%. However, the bank was able to increase its yield on advances by 54bp qoq, leading to a sequential expansion of 14bp in reported NIM.

Exhibit 6: Yield on advances up 54bp qoq...


12.00 11.60 11.20 10.80 10.40 10.00 9.60 9.20 8.80 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 9.90 10.39 10.71 11.16 11.70

Exhibit 7: ...leading to 14bp qoq NIM expansion


(%)
3.50 3.00 2.50 2.00 1.50 1.00 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 3.05 3.20 3.13 3.02 3.16

Source: Company, Angel Research

Source: Company, Angel Research

Weak treasury sequentially

income

draws

non-interest

income

39.9

39.5

down

Non-interest income declined by 4.6% qoq (up 6.9% yoy) to `162cr, mainly due to a sequential 29.0% decline in treasury income to `47cr. Income from recoveries was also poor, declining by 19.1% qoq to `16cr. Commission and brokerage income was sluggish during 2QFY2012, declining by 3.5% qoq to `44cr.

Slippages high as some chunky accounts slip during 2QFY2012


During 2QFY2012, the bank continued witnessing asset-quality concerns with slippages increasing by 58.4% sequentially to `621cr. Consequently, annualized slippage ratio stood at 4.6% for 2QFY2012 (2.9% in 1QFY2011). Gross NPA ratio and net NPA ratio deteriorated to 3.5% and 2.2% in 2QFY2012 from 2.9% and 1.7% in 1QFY2012, respectively. As of 2QFY2012, provision-to-coverage ratio including technical write-offs stood at 65.0% (70.2% in 1QFY2012).

November 2, 2011

United Bank of India | 2QFY2012 Result Update

The bank switched over accounts worth `5lakhs and below to system-based NPA recognition in 2QFY2012. Management indicated that the switchover did not have any material impact on the asset quality and higher slippages witnessed during the quarter were due to three large corporate accounts (~`314cr out of total `621cr slippages), which became non-performing during 2QFY2012. The banks exposure to the power sector as of 2QFY2012 stands at `5,700cr (10.5% of overall advances), ~85% of which is towards private sector lending. The remaining (`845cr) is distributed between the West Bengal and Rajasthan state electricity boards.

Exhibit 8: NPA ratios deteriorate in 2QFY2012


Gross NPAs (%) 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 71.2 71.8 Net NPAs (%) 72.1 70.2 65.0 70.0 60.0 50.0 PCR (%, RHS) 80.0

Exhibit 9: Slippages increase considerably in 2QFY2012


Slippages (%) 5.0 4.0 3.0 2.0 0.3 0.5 0.5 0.9 0.6 Credit cost (%, RHS) 1.0 0.8 0.6 0.4

3.1 1.6

2.9 1.5

2.5 1.4

2.9 1.7

3.5 2.2

1.9

1.9

3.2

2.9

40.0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12

4.6

1.0 -

0.2 -

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 10: High opex-to-average assets


Cost-to-income ratio (%) 52.0 50.0 48.0 46.0 1.6 1.5 1.7 1.6 1.7 Opex to average assets (%, RHS) 1.8 1.7 1.6

Exhibit 11: Tier-I ratio comfortable at 8.9% for 2QFY12


Tier-I CAR (%) 16.0 12.0 8.0 4.0 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 8.4 8.2 8.9 9.1 8.9 12.7 4.3 12.5 4.3 Tier-II CAR (%) 13.1 4.2 13.2 4.1 13.0 4.0

50.6

45.9

47.7

45.2

42.0 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11


Source: Company, Angel Research

46.5

44.0

1.5 1.4

Source: Company, Angel Research

November 2, 2011

United Bank of India | 2QFY2012 Result Update

Investment arguments
Structurally strong CASA than peers.
UBI has historically had a strong CASA ratio. The banks average CASA ratio during FY200510 has been 41.6%. Even during 2QFY2011, the bank had maintained a strong CASA ratio of ~40%, which is the highest in its peer group, which consists of banks such as UCO Bank (26.3%), Allahabad Bank (30.6%), Dena Bank (35.6%) and Syndicate Bank (30.5%). Of the total CASA deposits, saving deposits, which are less volatile, accounted for 31.6% of the total deposits, while current deposits accounted for 8.3%. This high proportion of CASA deposits is mainly because of a large retail customer base spread across the eastern and northeastern regions. Of the total branch network of 1,633, 81% is concentrated in the eastern and northeastern regions. Moreover, 59% of UBIs branches are located in rural and semi-urban areas, giving the bank an access to low-cost deposits.

leading to higher NIM


During 4QFY2010, UBI had reported NIM of 2.48%. However, measures taken by management in the form of shedding high-cost bulk deposits (19.3% in 2QFY2012 as against 27.0% a year ago), strong improvement in CASA ratio by 180bp from 38.1% in 4QFY2010 to 39.9% in 2QFY2012, shedding of low-yielding loans (~`1,700cr during FY2011) and a substantial increase in CD ratio (664bp increase in FY2011) have resulted in a sharp rise in NIM by 68bp to 3.16% in 2QFY2012. Going forward, we believe with CD ratio of 69.4% as of 2QFY2012 and strong CASA ratio, the bank is better placed than its peers to protect its NIM amid a high interest rate environment.

November 2, 2011

United Bank of India | 2QFY2012 Result Update

Investment concern
Lower other income compared to peers
During FY2011, other income excluding treasury grew moderately by 16% yoy despite 26.4% yoy growth in overall advances and 35.4% yoy rise in retail advances. Other income excluding treasury as a percentage of average assets remained stable at 0.53% in FY2011 (0.54% in FY2010), which is on the lower side. Even after factoring in a 14% CAGR over FY201113E in other income excluding treasury and taking into account revision in fee charges during 1QFY2012, the proportion of other income excluding treasury to average assets is expected to remain relatively low at 0.53% by FY2013E.

Outlook and valuation


UBI has a favorable deposit franchise, as reflected in its strong CASA ratio of 39.9% as of 2QFY2012. At the CMP, the stock is trading at P/ABV multiple of 0.6x FY2013E P/ABV. We have assigned a target FY2013E P/ABV multiple of 0.7x and, hence, we recommend a Buy rating on the stock with a target price of `82.

Exhibit 12: Key assumptions


Particulars (%) Credit growth Deposit growth CASA ratio NIMs Other income growth Growth in staff expenses Growth in other expenses Slippages
Source: Angel Research

Earlier estimates FY2012 16.0 15.0 40.2 2.5 (9.1) 13.0 10.0 2.2 FY2013 20.0 15.0 39.7 2.4 15.1 15.0 15.0 2.2

Revised estimates FY2012 17.0 11.0 41.7 2.7 (2.6) 11.0 5.0 2.8 FY2013 17.0 16.0 40.8 2.7 3.2 15.0 15.0 2.8

Exhibit 13: Change in estimates


FY2012 Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT
Source: Angel Research

FY2013 Var. (%) 7.6 7.2 7.5 (2.8) 17.9 33.7 5.5 5.5 5.5 Earlier Revised estimates estimates 2,554 2,785 666 3,220 1,672 1,548 587 961 312 649 641 3,426 1,625 1,801 813 987 320 667 Var. (%) 9.1 (3.9) 6.4 (2.8) 16.3 38.5 2.7 2.7 2.7

Earlier Revised estimates estimates 2,317 2,493 579 2,896 1,454 1,442 635 807 242 565 621 3,114 1,413 1,701 850 851 255 596

November 2, 2011

United Bank of India | 2QFY2012 Result Update

Exhibit 14: P/ABV band


Price (`) 160 140 120 100 80 60 40 20 0 0.6x 0.75x 0.9x 1.05x 1.2x

Jul-10

Mar-10

Mar-11

Jul-11

Nov-10

Source: Company, Angel Research;

November 2, 2011

Nov-11

Mar-12

United Bank of India | 2QFY2012 Result Update

Exhibit 15: Recommendation summary


Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk
#

Reco. Buy Accumulate Neutral Buy Neutral Buy Accumulate Neutral Accumulate Accumulate Accumulate Accumulate Neutral Buy Neutral Neutral Neutral Accumulate Neutral Accumulate Accumulate Buy Buy Neutral Accumulate Buy Neutral

CMP (`) 1,128 412 483 887 23 308 161 118 800 333 50 482 101 428 82 115 215 100 823 286 979 1,909 107 74 225 71 60

Tgt. price (`) 1,414 444 1,114 355 169 881 362 55 510 498 107 301 1,106 2,239 123 238 82 -

Upside (%) 25.4 7.9 25.6 15.4 5.2 10.1 8.7 10.9 5.9 16.3 7.3 5.3 13.0 17.3 15.3 5.8 15.2 -

FY2013E P/ABV (x) 1.8 1.1 3.3 1.6 1.1 1.9 0.7 0.8 1.1 0.9 0.7 0.9 0.7 0.7 0.6 0.7 0.9 0.6 0.9 0.7 1.1 1.4 0.7 0.9 0.9 0.6 0.8

FY2013E Tgt P/ABV (x) 2.3 1.2 2.0 2.3 0.8 1.2 1.0 0.7 1.0 0.8 0.7 0.7 1.3 1.7 0.8 0.9 0.7 -

FY2013E P/E (x) 9.9 8.4 16.8 13.0 6.8 10.2 4.3 5.3 5.7 5.5 4.3 5.6 5.2 4.4 3.9 5.4 5.5 4.0 5.2 5.0 5.8 7.3 4.7 4.4 5.1 4.2 7.3

FY2011-13E EPS CAGR (%) 17.7 19.5 30.5 23.3 15.6 19.9 12.2 (0.9) 14.2 15.2 38.1 (3.0) (16.1) 1.5 7.5 12.3 0.2 20.0 12.0 5.1 9.9 41.4 11.8 15.9 5.2 13.4 (3.2)

FY2013E RoA (%) 1.5 1.2 1.7 1.4 1.0 1.3 1.0 0.9 1.2 0.7 0.6 0.9 0.5 0.8 0.8 0.7 1.1 0.6 1.3 0.8 1.1 1.0 0.7 0.7 0.8 0.6 0.4

FY2013E RoE (%) 20.0 14.0 20.9 15.4 18.2 20.8 18.4 15.8 20.7 17.1 16.5 17.2 13.9 16.6 16.4 14.0 17.4 15.9 17.8 14.1 20.6 21.9 16.3 16.7 17.0 14.1 10.5

IndBk

Source: Company, Angel Research; Note:*Target multiples=SOTP Target Price/ABV (including subsidiaries), #Without adjusting for SASF

November 2, 2011

United Bank of India | 2QFY2012 Result Update

Income statement
Y/E March (` cr) NII - YoY Growth (%) Other Income - YoY Growth (%) Operating Income - YoY Growth (%) Operating Expenses - YoY Growth (%) Pre - Provision Profit - YoY Growth (%) Prov. & Cont. - YoY Growth (%) Profit Before Tax - YoY Growth (%) Prov. for Taxation - as a % of PBT PAT - YoY Growth (%) Preference Dividend PAT for Eqty.SH - YoY Growth (%) FY07 1,150 13.7 348 (22.1) 1,498 2.8 778 (4.3) 719 11.7 415 13.9 304 8.8 37 12.1 267 30.7 267 30.7 FY08 905 (21.3) 466 33.9 1,370 (8.5) 903 16.0 467 (35.1) 288 (30.7) 179 (41.1) 34 19.1 145 (45.7) 145 (45.7) FY09 1,162 28.4 491 5.5 1,652 20.6 1,045 15.7 607 30.0 431 49.7 176 (1.6) 62 35.0 115 (20.9) 115 (20.9) FY10 1,391 19.8 559 13.8 1,950 18.0 1,074 2.8 876 44.2 465 8.0 411 132.6 88 21.5 322 181.0 17 305 166.1 FY11 2,169 55.9 637 14.0 2,806 43.9 1,299 21.0 1,507 72.1 838 80.1 669 63.0 145 21.7 524 62.5 67 457 49.7 FY12E 2,493 14.9 621 (2.6) 3,114 11.0 1,413 8.8 1,701 12.9 850 1.4 851 27.3 255 30.0 596 13.7 79 517 13.1 FY13E 2,785 11.7 641 3.2 3,426 10.0 1,625 15.0 1,801 5.9 813 (4.3) 987 16.0 320 32.4 667 11.9 79 588 13.7

Balance sheet
Y/E March (` cr) Share Capital Equity Preference Reserves & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab & Prov. Total Liabilities Cash balances Bank balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%) FY07 1,532 1,532 883 37,167 27.1 400 700 1,628 42,310 2,686 1,599 14,602 22,156 42.7 605 661 42,310 27.3 FY08 1,532 1,532 1,129 26.4 1,162 1,275 2,242 5,249 623 FY09 1,782 1,532 250 1,295 16.1 457 1,525 2,436 4,532 1,878 FY10 866 316 550 3,037 68,180 25.0 915 1,525 2,481 77,005 4,707 1,671 26,068 42,330 19.6 651 1,578 77,005 24.1 FY11 1,144 344 800 3,877 77,845 14.2 2,887 1,525 2,763 90,041 5,943 1,385 26,259 53,502 26.4 819 2,133 90,041 16.9 FY12E 1,144 344 800 4,274 86,408 11.0 2,998 1,784 3,336 99,945 5,617 1,999 26,483 62,598 17.0 882 2,367 99,945 11.0 FY13E 1,144 344 800 4,722 100,233 16.0 3,468 2,088 3,947 115,602 6,515 2,312 29,808 73,239 17.0 989 2,738 115,602 15.7

46,971 54,536

54,311 62,031

18,515 17,924 27,858 35,394 25.7 623 1,443 28.4 27.0 624 1,679 14.2

54,311 62,031

November 2, 2011

10

United Bank of India | 2QFY2012 Result Update

Ratio analysis
Y/E March Profitability ratios (%) NIMs Cost to Income Ratio RoA RoE B/S ratios (%) CASA Ratio Credit/Deposit Ratio CAR - Tier I Asset Quality (%) Gross NPAs Net NPAs Slippages Loan Loss Prov. /Avg. Assets Provision Coverage Per Share Data (`) EPS ABVPS (75% cover.) DPS Valuation Ratios PER (x) P/ABVPS (x) Dividend Yield DuPont Analysis NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes RoA 3.0 1.1 1.9 0.1 2.1 0.8 2.9 2.1 0.8 0.1 0.7 0.7 21.0 14.8 1.9 0.6 1.3 0.4 1.6 0.6 2.2 1.9 0.4 0.1 0.3 0.3 23.7 7.1 2.0 0.7 1.3 0.4 1.6 0.5 2.1 1.8 0.3 0.1 0.2 0.2 25.7 5.1 2.0 0.7 1.3 0.3 1.6 0.5 2.1 1.5 0.6 0.1 0.5 0.0 0.4 26.4 11.6 2.6 1.0 1.6 0.2 1.8 0.5 2.4 1.6 0.8 0.2 0.6 0.1 0.5 25.8 14.1 2.6 0.9 1.7 0.1 1.9 0.5 2.4 1.5 0.9 0.3 0.6 0.1 0.5 25.3 13.7 2.6 0.8 1.8 0.1 1.9 0.5 2.4 1.5 0.9 0.3 0.6 0.1 0.5 25.8 14.1 40.7 6.1 0.4 75.0 5.3 0.4 94.9 5.2 7.4 0.8 2.8 5.4 0.7 3.1 4.7 0.6 4.2 4.2 0.6 4.9 1.7 11.6 0.3 0.9 13.4 0.3 0.7 13.6 0.0 9.6 2.0 13.3 2.2 15.0 3.0 17.1 3.5 86.3 101.2 109.6 121.3 3.6 1.5 2.6 0.6 59.2 2.7 1.1 1.4 0.5 59.8 2.8 1.5 2.9 0.3 48.5 3.2 1.8 2.7 0.4 43.3 2.5 1.4 2.3 0.5 44.1 3.8 1.8 2.8 0.7 55.1 4.7 1.9 2.8 0.6 60.6 42.0 59.6 12.0 7.7 38.6 59.3 11.2 6.4 37.8 64.9 12.4 7.0 38.1 62.1 12.0 7.7 40.8 68.7 12.2 8.3 41.7 72.4 12.1 8.1 40.8 73.1 11.6 7.6 3.1 52.0 0.7 14.8 1.9 65.9 0.3 7.1 2.1 63.3 0.2 5.1 2.1 55.1 0.5 11.6 2.7 46.3 0.6 14.1 2.7 45.4 0.6 13.7 2.7 47.4 0.6 14.1 FY07 FY08 FY09 FY10 FY11 FY12E FY13E

Preference Dividend
ROA after Pref Div Leverage RoE

November 2, 2011

11

United Bank of India | 2QFY2012 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

United Bank of India No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

November 2, 2011

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