ICRA, the credit rating agency, has elevated the ratings of various Union Bank instruments from ‘AA+’ to ‘AAA’ and concurrently adjusted the outlook to ‘stable’ from ‘positive’.
The upswing in Union Bank’s long-term rating is attributed to a sustained enhancement in the earnings profile. This improvement stems from a decrease in fresh non-performing asset (NPA) additions, robust recoveries/upgrades, and a commendable provision coverage on legacy NPAs, resulting in a moderation in credit costs.
ICRA, in its rationale, highlighted that the strengthening of capitalization levels and solvency profile has been gradual but notable, primarily driven by improvements in internal capital generation.
On November 23, Union Bank of India shares settled at Rs 106 on the NSE, experiencing a marginal decline of 0.61 percent from the closing price of the preceding session.
However, as of 11:03 am, the shares exhibited a 0.61% uptick, trading at ₹106.75.
In the financial report for the quarter ending September FY24, Union Bank reported a robust net profit of Rs 3,511 crore, reflecting a substantial 90 percent year-on-year increase. The net interest income also demonstrated a commendable growth of 10 percent year-on-year, reaching Rs 9,126 crore in the quarter ended September 2023, with a net interest margin expansion of 3 basis points to 3.18 percent.
