Union Bank of India has received significant rating actions from CARE Ratings Limited, with the agency assigning an AAA rating with stable outlook to the bank's infrastructure bonds while reaffirming ratings across multiple instruments on March 13, 2026.

Rating Actions Summary

CARE Ratings' comprehensive rating review covered multiple debt instruments totaling Rs. 13,200.00 crore:

Strong Market Position and Financial Profile

The ratings reflect Union Bank's robust position in the Indian banking system as the fifth largest public sector bank. The bank maintains a significant market presence with established franchise through its PAN-India branch network of 8,671 branches including two overseas branches and 8,300 ATMs as of December 31, 2025. This systemic importance, combined with 74.76% government ownership, provides strong sovereign support backing.

Union Bank's financial metrics demonstrate healthy performance across key parameters:

Asset Quality Improvements and Profitability

The bank has demonstrated significant improvement in asset quality metrics with slippage ratio declining to 0.89% (annualized) for 9MFY26 compared to 1.40% in FY25. The provision coverage ratio excluding technically written-off accounts stood at 83.61% as of December 31, 2025.

Union Bank reported net profit of Rs. 13,381.00 crore for 9MFY26 on total income of Rs. 93,576.00 crore. However, the bank's net interest margin witnessed pressure declining to 2.44% for 9MFY26 from 2.64% in 9MFY25 on an annualized basis due to faster repricing of advances compared to deposits.

Capital Adequacy and Government Support

Union Bank maintains strong capitalisation levels well above regulatory requirements with capital adequacy ratio of 16.49% as of December 31, 2025. The bank's capital position was strengthened by equity capital raise of Rs. 8,000.00 crore in FY24 through qualified institutional placement. The bank has board approved plan of raising capital of Rs. 6,000.00 crore through equity, additional Tier-I and Tier-II bonds in FY26.

Rating Outlook and Key Monitorables

CARE Ratings' stable outlook reflects expectations that Union Bank will register steady growth in advances and deposits while maintaining healthy profitability and stable asset quality. However, the rating agency noted that maintaining asset quality parameters aligned with peer banks and improvement in CASA deposit proportion from current 33.94% remain key rating monitorables for future performance.

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Union Bank of India has announced that its Committee of Directors for Fund raising (Non-Capital) will convene on March 16, 2026, to discuss and approve the issuance of various bond instruments. The meeting notification was formally communicated to stock exchanges on March 11, 2026.

Meeting Agenda and Bond Issuance Plans

The Committee of Directors meeting has been specifically scheduled to address the approval of multiple bond categories:

The bank's strategic focus on infrastructure financing and affordable housing reflects its commitment to supporting key economic sectors. Additionally, the inclusion of green bonds and sustainable bonds demonstrates the bank's alignment with environmental, social, and governance (ESG) principles.

Regulatory Compliance

The announcement was made in strict compliance with SEBI regulations, specifically under Regulation 29(1)(d), 29(2), and 50(1)(d) of the SEBI (Listing Regulations and Disclosure Requirements) Regulations, 2015. This regulatory framework mandates prior intimation of board and committee meetings to stock exchanges.

Official Communication Details

The formal notification was issued with reference number ISD/445/2025-26 and was digitally signed by Ashish Mishra, Company Secretary of Union Bank of India, on March 11, 2026. The communication was simultaneously sent to both BSE Limited and the National Stock Exchange of India Limited, ensuring comprehensive market disclosure.

The meeting represents a significant step in the bank's capital market strategy, particularly in the non-capital fund raising segment, which could strengthen its financing capabilities across priority sectors.