Union Bank of India has reported a net profit of Rs 4,249 crores for Q2 FY26, marking a 3.25% quarter-on-quarter increase. The bank's performance reflects its strategic focus on sustainable growth and bottom-line strength.

Key Financial Highlights

• Net Profit: Rs 4,249.00 crores for Q2 FY26 (3.25% Q-o-Q increase)
• H1 FY26 Net Profit: Rs 8,365.00 crores
• Operating Profit: Rs 6,814.00 crores for Q2 FY26
• H1 FY26 Operating Profit: Rs 13,723.00 crores

Profitability and Capital Adequacy

• Return on Assets (ROA): 1.16%
• Return on Equity (ROE): 15.08%
• Capital Adequacy Ratio: 17.07%
• CET-1 Ratio: 14.37%

Asset Quality Improvement

• Gross NPA: Reduced by 107 bps Y-o-Y to 3.29%
• Net NPA: Declined by 43 bps Y-o-Y to 0.55%
• Provision Coverage Ratio (PCR): 95.13%

Credit Cost and Slippages

• Credit Cost: 22 bps for Q2 FY26 (down from 109 bps in Q2 FY25)
• Slippage Ratio: 0.91% in Q2 FY26 (down from 2.40% in Q2 FY25)
• H1 FY26 Gross Slippages: Rs 4,496.00 crores
• H1 FY26 Recoveries: Rs 6,284.00 crores

Business Growth and Strategy

The bank has strategically reduced high-cost bulk deposits by 21.85% Y-o-Y to protect margins. This move has helped maintain the Net Interest Margin (NIM) at 2.67%. Union Bank aims to shift its portfolio mix toward retail, agriculture, and MSME segments, targeting 58% from the current 55%.

Future Outlook

Managing Director and CEO Asheesh Pandey indicated that the bank expects to achieve system-level growth going forward, aspiring for 9-10% growth on both asset and liability sides. The bank plans to focus on sustainable growth while maintaining a balance between top-line expansion and bottom-line strength.

Union Bank of India is set to celebrate its 107th Foundation Day on November 11th, with plans to launch new digital initiatives, including mobile banking solutions for business customers. The management is working on a comprehensive strategy document outlining plans for 1-year, 3-year, and 5-year horizons, which will be subject to quarterly or half-yearly reviews for mid-course corrections.

As the banking sector navigates through evolving market conditions, Union Bank of India's focus on margin protection and strategic growth in retail and MSME segments positions it well for the coming quarters. The bank's improved asset quality and strong capital position provide a solid foundation for future growth initiatives.

Union Bank of India , one of India's leading public sector banks, has reported a 3.24% year-over-year growth in total business for the quarter ended September 30. This growth comes alongside improvements in asset quality and advancements in key financial metrics.

Business Growth and Advances

The bank's gross advances increased by 4.99% year-over-year, reflecting a robust expansion in its lending portfolio. This growth in advances has contributed significantly to the overall business growth of the bank.

Deposit Growth

Total deposits grew by 1.90% year-over-year, indicating a steady inflow of funds from customers. While the deposit growth is modest, it demonstrates the bank's ability to maintain and slightly expand its deposit base in a competitive banking environment.

Improved Asset Quality

A notable highlight of the bank's performance is the improvement in asset quality. The gross non-performing assets (NPA) ratio dropped to 3.29%, marking a significant improvement in the bank's loan portfolio quality. This reduction in NPAs suggests enhanced risk management practices and improved recovery efforts by the bank.

Financial Performance

The bank's financial results for the quarter reveal several key indicators:

While the operating profit and net profit show a year-over-year decline, the bank has maintained profitability in the current economic environment.

Capital Adequacy and Liquidity

Union Bank of India maintains a strong capital position with a Capital Adequacy Ratio (CAR) of 17.07% under Basel III norms, well above the regulatory requirements. The Common Equity Tier 1 (CET1) ratio stands at 14.37%, indicating a robust core capital base.

Outlook

The bank's performance this quarter, characterized by business growth and improved asset quality, positions it well for future growth. The reduction in NPAs is particularly encouraging, as it may lead to lower provisioning requirements and potentially higher profitability in upcoming quarters.

Union Bank of India's focus on expanding its advance portfolio while simultaneously improving asset quality demonstrates a balanced approach to growth and risk management. As the bank continues to navigate the evolving economic landscape, its strong capital position and improving asset quality provide a solid foundation for sustainable growth.