Angel Broking has recommended `Buy` on United Bank of India with a price target of Rs 87 as against the current market price (CMP) of Rs 64 in its report dated May. 07, 2012.

United Bank reported a weak set of numbers with net profit growing by muted 4.2% yoy to Rs 1.49 billion, which were below our estimates mostly due to higher provisioning expenses than estimated by us. 

Calculated margins for the bank dipped by 38bp qoq to 2.6%.

Asset quality of the bank deteriorated during 4QFY2012 with gross NPA level increasing by 12.2% qoq.

The bank`s provisioning coverage ratio, however, increased by 265bp qoq to 69.2%, leading to net NPA level declining by 8.7% sequentially. It has given a Buy rating on the stock with a target price of Rs 87.

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