Union Bank of India

“Union Bank of India is a credibly recovering PSU bank trading at 0.94x book with a 15.7% ROE — genuinely cheap on a standalone basis — but structural government ownership at 74.8% creates a permanent governance discount that previous NPA cycles have proven is not merely theoretical. The NPA cleanup (GNPA now 2.82%, NNPA 0.48%) is nearly complete, removing the biggest single driver of earnings uplift, while NIM compression to 2.64% and systematic private-bank encroachment on urban credit quality set a modest ceiling on future returns. The thesis for 2.5–3x over a decade is plausible but not compelling, and conviction is insufficient to act decisively at the current price.”