Union Bank of India · Material risks, their source context, and severity in the latest available quarter.
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Risk intelligence
With only INR 23,947 crore credit expansion in H1 against INR 1.17 lakh crore needed for 13% annual growth, management must disburse ~INR 93,000 crore in H2 from existing pipeline. Execution depends on capital cycle recovery and borrower demand.
The slipped PSU account (INR ~3,400 crore provision at 20%) has recovery 'in process' at government and bank level, with no specific timeline or haircut guidance provided. Management stated 'no haircut as of now' but acknowledged resolution is ongoing.
Analyst raised concern about INR 1,664 crore SMA-2 book (still in SMA0) representing potential future slippages. Management confirmed one account remains in SMA0 with standard provisioning and cash flows intact, but resolution plan is 'being worked out.'
Deposit growth of 9.2% YoY is at lower end of 9%-11% target range with CASA growth slowing. H1 deposit growth was only 1.67%, and cost of deposits increased 35bps YoY due to repricing of retail TD products.
