November 5, 2012 / 8:33 AM / 5 years ago

BofA-ML names Union Bank top govt lender

Reuters Market Eye - Bank of America-Merrill Lynch upgrades Union Bank of India (UNBK.NS) to ‘buy’ from ‘underperform’ after the state-run lender reported a surge in July-September earnings on Friday.

A cashier (L) counts currency notes as customers wait inside a bank in Hyderabad March 22, 2010. REUTERS/Krishnendu Halder/Files

BoA-ML says “asset quality was far better than expected,” and adds: “We believe the worst is behind us.”

The investment bank calls Union Bank its top pick among government-run banks, says earnings to improve on the back of lower credit costs, while margins are showing signs of stability.

BoA-ML also raises its price objective on the stock to 270 rupees from 175 rupees.

Union Bank shares down 1 percent at 220.86 rupees as of 1:56 p.m. after surging 15.7 percent over the previous three sessions.

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