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Shares of Union Bank of India fell due to increase in provisioning for bad loans. The stock fell as much as 7.7 per cent to Rs 124, its lowest in over 7 months.
State-run bank's Q1 profit fell about 30 per cent to Rs 117 crore ($18.23 million), missing analysts' average estimate, according to Thomson Reuters data.
As of end-June, gross bad loans as a percentage of total loans rose to 12.63 per cent from 11.17 per cent at the end of March.
“Ageing of the NPL (non-performing loan) portfolio and continued elevated slippages and credit costs will pressurise earnings,” Motilal Oswal analysts wrote in a note.
Out of 29 analysts covering the stock, five rate it “buy" or higher, eight “hold", the rest “sell” or lower.
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