If you are looking at PSU banks then SBI or even BOB should be a much better bet. Anyways let us look at how the latest results of Union Bank have stacked up before taking a call. The bank reported a net loss of Rs.1,194 crore in the September quarter on the back of higher provisioning for doubtful debts. The loss was substantially higher than the consensus estimates put out by Reuters. The reason for the loss was that the bank made a provision for huge divergence of Rs.1587 crore highlighted by the RBI. That entire divergence has been written off in this quarter itself. Let us also look at some of the other key financials.

Union Bank had an exposure to Dewan Housing Finance (DHFL) to the tune of Rs.2000 crore which has turned NPA and the bank has provided for the same. On the positive side, the Net Interest Income (NIII), or the difference between interest earned on loans and that paid on deposits, for Jul-Sep quarter increased 16.5% to Rs.2906 crore. However, there are still some key concerns on the GNPA front. The Gross non-performing assets (NPAs) stood at 15.24% in the September quarter which is almost flat over the last one year. Post-provision, the net NPA ratio was at 6.98% against 7.23% in the previous quarter.

The gross NPAs are still too high at 15.24% and that will be a major hassle for the company, although a lot of that has been provided for. Instead of going for Union Bank, you may be better off going for a PSU bank like SBI or BOB. You can take a call accordingly.