Advertisement
Bank

Union Bank of India Reports Robust Q3 FY26 Performance; Net Profit Rises to ₹5,017 Crore

Robust RAM Growth, Focus on CASA & Tech-Driven Efficiency Drive Performance; Bank Confident on Managing ECL Transition.
Union Bank of India Reports Robust Q3 FY26 Performance; Net Profit Rises to ₹5,017 Crore

Mumbai: Union Bank of India announced strong financial results for the quarter ended December 31, 2025, with a standalone net profit of ₹5,017 crore. The bank's management, led by MD & CEO Shri Asheesh Pandey, highlighted the performance during a post-earnings conference call, attributing the results to strategic portfolio management, robust growth in retail, agriculture, and MSME (RAM) segments, and a focus on operational efficiency.

Key Financial and Operational Highlights:

  • Profitability: Net Profit for Q3 FY26 stood at ₹5,017 crore. The bank reported a Return on Assets (RoA) of 1.35% and a Return on Equity (RoE) of 24.27%, which management noted were at their highest levels.

  • Business Growth: Gross advances crossed the ₹10 lakh crore mark for the first time, growing 7.13% year-on-year (YoY). The RAM portfolio grew healthily—Retail by 21.67%, Agri by 19.75%, and MSME by 11.50% YoY.

  • Asset Quality: Gross NPA and Net NPA ratios improved to 4.36% and 0.94%, respectively. SMA-2 (Special Mention Account) over ₹5 crore was at a low of ₹4,285 crore. Provision Coverage Ratio (PCR) remained strong at over 95%.

  • NIM Resilience: Despite a cumulative 125 basis points repo rate cut, the Net Interest Margin (NIM) was defended at 2.76% for Q3, showing improvement from 2.70% in the previous quarter. Management credited this to strategic shedding of high-cost bulk deposits (₹38,000-40,000 cr), contraction of the treasury book (₹15,000 cr), and churning of low-yielding assets.

  • Deposit & CASA: Total deposits grew 3.36% YoY. A significant highlight was a 140 basis point quarter-on-quarter improvement in CASA ratio, reflecting a strategic shift towards low-cost funds.

Strategic Focus: Digital Transformation & Operational Efficiency

Management emphasized its digital and operational initiatives. The bank was recently ranked 2nd in the EASE Reforms Index and won four IBA Technology Awards, including 'Best Bank Tech Award'.

  • Project MUSKAAN: An internal project aimed at simplifying over 300 processes to enhance employee ease and, consequently, customer service.

  • Tech Investment: The bank has a capital expenditure budget of ₹1,600 crore for technology in FY26, focused on cybersecurity, infrastructure, and a new digital business vertical.

  • Digital Growth: Approximately 80% of new liability accounts are opened through digital channels.

 

Advertisement

Management Outlook on Key Issues:

  1. Loan Growth: The management expressed confidence in sustaining and improving the sequential loan growth momentum (over 4% QoQ), citing a strong sanction pipeline of ₹24,000-26,000 crore. The aim is to achieve industry-level growth rates soon.

  2. ECL (Expected Credit Loss) Norms: The bank stated it is well-prepared for the transition to ECL accounting. The net additional provision required is estimated at ₹4,200-4,300 crore, which can be absorbed without needing the full five-year dispensation period. The run-rate credit cost is not expected to see a material shift from the current range (20-40 bps).

  3. Net Interest Margin (NIM): Executives expect NIM to improve in FY27 as high-cost deposits reprice downwards, supported by a continued focus on growing CASA.

  4. Credit Cost: The credit cost for 9M FY26 is 26 bps. The bank aims to maintain credit costs around this level, supported by a high-quality corporate book (95% rated BBB and above) and low slippages.

  5. Project Finance Provisions: The impact of new RBI guidelines on project finance provisioning is expected to be minimal and incremental, applying mainly to new projects with extended commissioning dates.

Call Participants:

The conference call featured the bank's top leadership: Shri Asheesh Pandey (MD & CEO), Executive Directors Shri Nitesh Ranjan, Shri Ramasubramanian S., Shri Sanjay Rudra, Shri Amresh Prasad, and CFO Shri Avinash Prabhu.

The detailed transcript of the earnings call and the financial results presentation have been filed with the stock exchanges and are available on the bank's website.

 

Advertisement

About Union Bank of India: Union Bank of India is a leading public sector bank with a nationwide presence. It offers a wide range of financial products and services to retail, corporate, and MSME customers.

Advertisement