Union Bank of India reported a consolidated net profit of Rs 5,641.52 crore for the June quarter of the current fiscal, marking a 27.5 per cent increase from the Rs 4,427.94 crore recorded in the same period last year. The growth was driven by improved asset quality, higher interest income, and expanded margins, according to the bank’s regulatory filing.
Financial Performance and Net Interest Margins
The bank’s net interest income (NII) grew 1.05 per cent year-on-year, rising to Rs 27,203 crore from Rs 26,919 crore. Growth in NII was tempered by the performance of net interest margins (NIM), which saw a modest increase of 0.04 per cent year-on-year and 0.16 per cent sequentially, settling at 2.80 per cent for the quarter.
Management remains optimistic about future margin expansion. Asheesh Pandey, MD and CEO of Union Bank of India, stated that the bank expects to improve margins further despite current shifts in the interest-rate environment.
Foreign Currency Deposits and NRI Strategy
To bolster foreign capital inflows, the bank is actively participating in the special Foreign Currency Non-Resident (FCNR-B) window introduced by the Reserve Bank of India (RBI). The RBI-backed initiative covers currency hedging costs to support India’s external position.
The bank has set a target to mobilize between USD 1.5-2 billion through this window by September. As of the latest earnings call, the bank had secured USD 106 million in FCNR-B deposits. To accelerate this progress, the bank has established a dedicated NRI cell and identified 20 branches with high concentrations of non-resident Indian customers to lead a targeted mobilization campaign.
Asset Quality and Deposit Growth
The bank’s balance sheet saw broad expansion during the quarter:
- Global Deposits: Rose 3.50 per cent year-on-year to Rs 12.83 lakh crore.
- CASA Ratio: Improved to 35.09 per cent, up from 32.51 per cent in the year-ago period, with Current Account and Savings Account (CASA) deposits climbing 11.73 per cent to Rs 4.50 lakh crore.
- Gross Advances: Increased by 12.50 per cent to Rs 10.96 lakh crore, with the Retail, Agri, and MSME (RAM) segment contributing Rs 6.08 lakh crore.
Asset quality metrics showed improvement, with the bank’s gross non-performing assets (NPAs) decreasing by 0.87 per cent to 2.65 per cent as of June 30. Following the earnings announcement, shares of Union Bank of India closed 1.08 per cent higher at Rs 172.4 on the BSE.
Key Financial Highlights
| Metric | Q1FY27 Performance |
|---|---|
| Net Profit | Rs 5,641.52 crore (+27.5 per cent YoY) |
| Net Interest Margin | 2.80 per cent |
| Gross NPA | 2.65 per cent |
| CASA Ratio | 35.09 per cent |
| Gross Advances | Rs 10.96 lakh crore (+12.50 per cent YoY) |
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