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 successfully completed the annual interest payment on its bonds, demonstrating continued adherence to its debt service obligations. The bank paid ₹127.50 crores as annual interest on March 2, 2026, meeting the scheduled due date without any delays.

Bond Payment Details

The interest payment pertains to bonds with specific regulatory and financial parameters that highlight the bank's structured debt management approach.

Payment Timeline and Compliance

The bank maintained its consistent payment schedule, with the current interest payment made exactly on the due date of March 2, 2026. The previous annual interest payment was completed on March 3, 2025, showing the bank's commitment to regular debt servicing.

The payment was processed according to the beneficiary position as of the record date of February 15, 2026, and followed the mandates provided by investors. The bank confirmed that applicable Tax Deducted at Source (TDS) was deducted as per regulatory requirements.

Regulatory Framework

This interest payment disclosure was made in compliance with Regulation 57 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The regulation mandates listed entities to provide timely information about interest payments and redemptions on their debt securities.

The bank's Investor Services Division, based at Union Bank Bhavan in Mumbai's Nariman Point, handled the payment process and regulatory reporting. Company Secretary Ashish Mishra signed the compliance certificate, confirming the successful completion of the interest payment obligation.

Financial Implications

The timely payment of ₹127.50 crores represents the bank's ongoing commitment to honoring its debt obligations. With the total issue size of ₹1,500 crores, this annual interest payment reflects the cost of the bank's debt capital and its ability to service these obligations punctually.

The successful completion of this payment without any delays or complications reinforces the bank's financial discipline and regulatory compliance standards in its debt management practices.