Union Bank of India , one of India's leading public sector banks, has reported a 12% year-on-year growth in net profit for the first quarter, despite facing margin pressure due to recent interest rate cuts.

Key Financial Highlights

Credit Growth and Portfolio Mix

Union Bank of India demonstrated strong performance in its focus segments during the first quarter. The bank's overall credit growth of 6.80% was primarily driven by robust expansion in retail and MSME sectors. Retail loans saw an impressive growth of 26.00%, while MSME loans increased by 18.00%. The RAM segment, which includes Retail, Agriculture, and MSME loans, grew by 10.30%, underlining the bank's strategic focus on these areas.

Margin Pressure and Interest Rate Impact

The bank experienced some pressure on its Net Interest Margin (NIM), which declined by 11 basis points to 2.76%. This reduction was attributed to recent interest rate cuts, with 48% of the bank's loan portfolio linked to the External Benchmark Lending Rate (EBLR) experiencing immediate repricing. Despite this challenge, the bank managed to improve its Return on Assets (ROA) to 1.11% from 1.06% in the same quarter of the previous year.

Asset Quality and Provisions

Union Bank of India reported marginal improvements in its asset quality metrics:

• Gross Non-Performing Asset (NPA) and Net NPA ratios showed slight improvement
• Provision coverage ratio increased to 95.00%
• Credit cost decreased to 47 basis points
• Slippage ratio remained below 1%

These figures indicate the bank's continued efforts in managing asset quality and maintaining adequate provisioning.

Capital Adequacy and Liquidity

The bank maintained a strong capital position with a Capital Adequacy Ratio of 18.30%. In terms of liquidity management, Union Bank reduced its bulk deposits by 7.00% while maintaining a comfortable Credit-Deposit (CD) ratio of 76.00%.

Other Income and Future Outlook

Treasury income for the quarter stood at Rs. 1,418.00 crores, compared to Rs. 1,026.00 crores in the previous year's corresponding quarter. However, the bank noted the absence of Priority Sector Lending Certificate (PSLC) income this quarter due to regulatory changes affecting agricultural gold loans.

Looking ahead, the bank's management expects a 20-25 basis points moderation in NIM for the full year but aims to maintain ROA above 1%. They also anticipate some recovery in PSLC income in subsequent quarters.

Union Bank of India's first quarter results demonstrate its resilience in a challenging interest rate environment, with strong growth in focus segments offsetting margin pressures. The bank's strategic focus on retail and MSME lending, coupled with improved asset quality, positions it well for the remainder of the fiscal year.

Union Bank of India , one of India's leading public sector banks, has announced a significant change in its board composition. The bank has appointed Shri Rohan Chand Thakur as the new Government Nominee Director, effective July 24, 2025. This appointment comes as a replacement for Shri Sameer Shukla, who previously held the position.

New Director's Profile

Shri Rohan Chand Thakur brings a wealth of experience to his new role at Union Bank of India. He is a distinguished Indian Administrative Service (IAS) officer from the 2009 batch of the Himachal Pradesh Cadre. At the time of his appointment, Thakur was serving as Director in the Ministry of Finance, Department of Financial Services, Government of India.

Educational Background

Thakur's educational credentials are impressive:

• Economics graduate from St. Stephen's College, Delhi
• Postgraduate in Management from IIM Ahmedabad
• Chevening Gurukul Fellow from the University of Oxford
• Master of Public Administration from Harvard Kennedy School, Harvard University

Professional Experience

With over 15 years of experience in various governmental roles, Thakur's career highlights include:

• District Commissioner of Hamirpur and Shimla
• Director in the Department of Information Technology
• Managing Director of Skill Development & Entrepreneurship Department
• Managing Director of Himachal Pradesh Financial Corporation
• Excise and Taxation Commissioner
• Managing Director of Himachal Road Transport Corporation

Appointment Details

The Central Government issued the notification for Thakur's appointment on July 24, 2025. As per the notification, his tenure begins immediately and will continue until further orders. This appointment is in line with Section 9(3)(b) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970.

Shareholder Approval

Union Bank of India has added this appointment as a new agenda item for shareholder approval at its upcoming 23rd Annual General Meeting, scheduled for August 1, 2025. The bank has issued an addendum to the original AGM notice, including this as Item No. 6 under Special Business.

Independence and Compliance

The bank has confirmed that Shri Rohan Chand Thakur has no existing relationships with other directors of Union Bank of India. Additionally, he holds no shares in the bank, ensuring his independence in the role. The bank also stated that Thakur is not debarred from holding the office of Director by any order of SEBI or any other authority.

This strategic appointment is expected to bring fresh perspectives to Union Bank of India's board, leveraging Thakur's extensive experience in public administration and finance. As the banking sector continues to evolve, such appointments play a crucial role in shaping the future direction of public sector banks in India.