Shares of Union Bank of India traded lower at ₹142.00 on Monday morning, down over 3%, after the lender announced its Q1 FY26 results over the weekend, highlighting a decline in its core income despite improved profitability and stable asset quality.
For the quarter ended June 30, 2025, Union Bank reported a net interest income (NII) of ₹9,112 crore, which is down from ₹9,412 crore in the same period last year. This decline in NII, which represents the difference between interest earned and interest expended, points to pressure on margins amid slower credit growth.
However, the bank’s net profit rose by 12% YoY to ₹4,115 crore, compared to ₹3,678 crore in Q1 FY25, supported by lower provisions and better cost control.
Asset quality metrics remained stable. Gross Non-Performing Assets (GNPA) ratio improved slightly to 3.52% from 3.60% in March 2025, while Net NPA was steady at 0.62%, almost unchanged from 0.63% at the end of March.
Provisions and contingencies at the end of Q1 FY26 stood at ₹1,664.5 crore, higher than ₹1,543.9 crore in Q4, but provisions specifically for NPAs declined to ₹1,152 crore from ₹1,675.7 crore in the previous quarter.
That said, the bank continues to face challenges in business growth. Gross advances increased just 7% YoY — the weakest growth in the past four quarters and the fourth consecutive quarter of single-digit growth. Deposits rose only 3.6% YoY, marking the sixth quarter of sub-10% growth.
The bank had earlier guided for loan growth of 11–13% and deposit growth of 9–11% in FY25, but ended the year with growth of 8.6% and 7.2%, respectively — missing its targets.
Despite the modest operational performance, the lender emphasised its focus on improving asset quality and maintaining profitability in a challenging environment.
