Union Bank provides general banking services in addition to securities dealing and general insurance.
Last year, Pacific Challenge placed a 'sell' recommendation on the stock as Union had announced a larger than expected interim net loss of HK$557 million. This loss was due to a HK$656 million provisioning charge. The cause of the provisioning charge was largely down to new management who had introduced tougher bad-loan performance criteria. The bank had also announced a one-for-two rights issue at HK$3.70.
Union Bank is currently at the centre of a proposed scheme by Industrial and Commercial Bank of China to inject its Hong Kong assets into the bank as part of a plan to turn its locally listed vehicle into a leading player in Hong Kong.
Graphic: THEN13gwz
