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Shares of Union Bank of India jumped as much as 6.3 per cent to Rs 184.25 due to improvement in asset quality trends.
After opening the session higher at Rs 182 against the previous close of Rs 173.30, shares of the public sector bank touched an intraday high of Rs 184.25 and a low of Rs 174 on the BSE. In terms of equity volume, 13.87 lakh shares exchanged hands on the BSE.
The uptrend in share price was despite the bank posting a net loss of ₹1,531 crore in the second quarter against a net profit of ₹177 crore in the year-ago period.
Net interest income (the difference between interest earned and interest expended) in the reporting quarter (Q2 FY18) nudged up a tad to ₹2,321 crore (₹2,277 crore in the year-ago quarter).
Rajkiran Rai G, MD and CEO, said the bank’s board decided to front-load provisions aggregating ₹1,566 crore towards the 11 accounts (as per RBI’s first list of 12 large stressed accounts that were referred under IBC) instead of spreading the same over three quarters beginning September 2017.
While profitability levels are low, improvement in asset quality trends are encouraging, according to CLSA analysts.
Up to Friday's close, the stock has risen 41 per cent this year.
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