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    Union Bank of India

    UNIONBANKNeutral
    Financial Services·14 Jan 2026
    Management Summary

    Union Bank delivered exceptional Q3 performance with significant profit growth and portfolio optimization. The bank strategically shed INR 40,000 crores of high-cost bulk deposits, contracted treasury by INR 15,000 crores, and eliminated IBPC portfolio of INR 20,000 crores. This repositioning helped defend NIMs despite substantial rate cuts while achieving strong advances growth and maintaining excellent asset quality.

    Highlights

    7

    • Net profit reached INR 5,017 crores, crossing INR 5,000 crores milestone

    • Business growth of 5.04% with gross advances increasing 7.13%

    • NIM defended at 2.76% despite 125 bps repo rate cuts during the year

    • Strong RAM segment growth: Retail 21.67%, Agri 19.75%, MSME 11.50%

    • Achieved highest ROA of 1.35% and highest ROE in bank's history

    • CASA improved by 140 bps, first time bank crossed INR 10 lakh crores advances

    • 95% of Corporate book rated BBB and above, SMA2 at lowest level of INR 4,285 crores

    Key financials

    Single quarter

    04 metrics
    1. 01Net Profit₹5,017 Cr
    2. 02Interest Income₹26,443 Cr
    3. 03Total Advances₹10.00L Cr+7.1%YoY
    4. 04Total Deposits—+3.4%YoY

    Guidance & targets

    4
    CategoryTargetPriority
    Asset Quality
    Credit Cost
    Similar to current levels (~26 bps)
    		High
    Credit Growth
    Loan Growth
    Better than current quarter performance
    		High
    NIM
    Net Interest Margin
    Defend current levels (2.76%)
    		Medium
    Branch Expansion
    Branch Openings
    75 branches this year, 200 going forward
    		High

    Risks & concerns

    4
    RiskSeverity

    Deposit Growth Lagging Credit Growth

    Deposit growth of only 0.95% in quarter vs 4% credit growth, CD ratio at 83.89% — Other acknowledged

    medium

    NIM Pressure from Rate Cuts

    125 bps repo rate cuts during the year but bank maintained NIM at 2.76% — Other acknowledged

    medium

    ECL Implementation Impact

    Transition impact estimated at INR 4,200-4,300 crores with adequate provisions already held — Other acknowledged

    low

    Recovery Portfolio Decline

    Recovery opportunities declining as fresh slippages reduce and portfolio quality improves — Other acknowledged

    low

    Q&A highlights

    6

    “RIDF is INR 198 crores. Actually, that is the only thing... Other income consists of some more parameters, which we will send you across, full details”

    Clarifies significant component of other interest income from RIDF investments

    asked by Marukh Adajania from Nuvama

    1 min read5 chapters

    Detailed Narrative

    01

    Portfolio Optimization Success

    Union Bank executed a strategic four-pillar portfolio optimization: (1) Shed INR 40,000 crores of high-cost bulk deposits, (2) Contracted treasury by INR 15,000 crores to move funds to credit, (3) Eliminated INR 20,000 crores IBPC portfolio, (4) Moved INR 10,000 crores from low-yielding to long-term loans. This helped defend NIM at 2.76% despite 125 bps rate cuts.

    02

    Strong RAM Segment Performance

    Retail, Agriculture and MSME (RAM) segments delivered robust growth with Retail at 21.67%, Agriculture at 19.75%, and MSME at 11.50% Y-o-Y. This diversified growth helped achieve overall business growth of 5.04% and demonstrated the bank's strength in granular lending segments.

    03

    Asset Quality Excellence

    Bank maintained excellent asset quality with 95% of Corporate book rated BBB and above, SMA2 at historic low of INR 4,285 crores, and PCR at 95%. Credit costs remained minimal at 26 bps for 9 months, supported by strong early warning systems and improved collection mechanisms.

    04

    Technology and Digital Leadership

    Union Bank received Best Tech Award from IBA with INR 1,600 crores technology budget. Project MUSKAAN focuses on process simplification affecting 300+ processes. The bank operates with DC-DR and near DC-DR sites, with 80% of liability accounts opened digitally and advanced cybersecurity framework.

    05

    Capital and Liquidity Strength

    Bank achieved highest ROA of 1.35% and highest ROE in its history. CASA improved by 140 bps demonstrating deposit quality improvement. The bank crossed INR 10 lakh crores advances milestone for the first time while maintaining comfortable capital and liquidity ratios.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.