Union Bank of India has officially approved a comprehensive bond issuance program worth ₹20,000 crore following the Committee of Directors meeting for fund raising (Non-Capital) held on March 16, 2026. The meeting, which commenced at 10.00 A.M. and concluded at 10.20 A.M., resulted in formal approval for multiple bond categories targeting infrastructure and affordable housing sectors.

Committee Approval Details

The Committee of Directors approved two major bond issuance categories during the March 16 meeting:

Strategic Fundraising Timeline

The bank has outlined a structured approach to capital deployment with specific timelines and targets. The long-term bonds worth ₹20,000 crore will be issued in one or more tranches, providing flexibility in market timing and investor engagement.

Out of the total approved amount, Union Bank of India may explore opportunities to raise ₹7,500 crore before March 31, 2026. This includes a base issue of ₹3,000 crore combined with a green shoe option of ₹4,500 crore, structured with a 10-year tenor to align with long-term infrastructure financing requirements.

Regulatory Compliance Framework

The meeting outcome was communicated to both BSE Limited (Scrip Code - 532 477) and National Stock Exchange of India Limited (Scrip Symbol - UNIONBANK-EQ) in compliance with SEBI regulations. The notification, bearing reference number ISD/449/2025-26, was digitally signed by Ashish Mishra, Company Secretary, ensuring full regulatory transparency.

Market Positioning Strategy

The approval of green bonds and sustainable bonds up to ₹5,000 crore demonstrates the bank's commitment to ESG principles and sustainable financing. This dual approach of traditional infrastructure bonds alongside green financing instruments positions Union Bank of India as a comprehensive provider of development finance, supporting both conventional infrastructure projects and environmentally beneficial initiatives.

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.

Source: None/Company/INE692A01016/96940bd0-d4a7-4238-a3a5-a68ad91b1cb2.pdf