Earnings Review
Fall in provisions lifts Union Bank of India's Apr-Jun PAT
This story was originally published at 15:56 IST on 19 July 2025
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--Union Bank Apr-Jun net profit INR 41.16 bln
--Analysts saw Union Bank Apr-Jun net profit at INR 43.17 bln
--Union Bank Apr-Jun net profit INR 41.16 bln vs INR 36.79 bln year ago
--Union Bank Apr-Jun total income INR 317.81 bln vs INR 308.74 bln year ago
--Union Bank Apr-Jun provisions INR 16.65 bln vs INR 27.56 bln year ago
--Union Bank Apr-Jun NPA provisions INR 11.53 bln vs INR 16.51 bln year ago
--Union Bank gross NPA ratio 3.52% as on Jun 30 vs 3.60% qtr ago
--Union Bank net NPA ratio 0.62% as on Jun 30 vs 0.63% qtr ago
--Union Bk Basel III capital adequacy ratio 18.30% as on Jun 30
--Union Bank Apr-Jun net interest income INR 91.13 bln, down 3.2% on year
--Union Bank Apr-Jun net interest margin 2.76% vs 3.05% year ago
--Union Bank Apr-Jun credit cost 0.47% vs 0.73% year ago
--Union Bank gross advances INR 9.745 tln as on Jun 30, up 6.8% on year
--Union Bank global deposits INR 12.40 tln as on Jun 30, up 3.6% on year
--Union Bank provision coverage ratio 94.65% as on Jun 30
By Pratiksha
NEW DELHI – Union Bank of India's net profit for the quarter ended June rose on year due to a sharp decline in provisions. The lender's bottom line for Apr-Jun rose 11.9% on year to INR 41.16 billion. However, sequentially, net profit fell 17.4%.
The state-owned bank's net profit was lower than analyst's expectations. The net profit of the bank was seen rising 17.3% on year to INR 43.17 billion for the quarter, according to the average of estimates by six brokerages.
The state-owned bank's provisions and contingencies declined 40% on year to INR 16.65 billion in the reporting quarter. This was the biggest on-year decline in provisions in five quarters. The provisions on non-performing assets fell 30.2% on year to INR 11.53 billion. Its provision coverage ratio was 94.65% as of Jun. 30, against 93.49% a year ago.
However, a contraction in the net interest margin, primarily due to the Reserve Bank of India's Monetary Policy Committee cutting the repo rate by 75 basis points between April and June, ate into the lender's bottom line. The bank's net interest margin fell 29 bps on year and 11 bps on quarter to 2.76% in Apr-Jun.
The lender's asset quality improved slightly, with the gross non-performing asset ratio declining to 3.52% as of Jun. 30, from 3.60% at the end of March and 4.54% as on Jun. 30, 2024. The net non-performing asset ratio was 0.62%, from 0.63% as on Mar. 31 and 0.90% at the end of June 2024.
The lender's total expenses during the quarter under review rose 7.7% on year to INR 248.73 billion. Of this, interest expenses increased 7.3% on year to INR 181.83 billion.
The bank's total income for the reporting quarter rose just 2.9% on year to INR 317.81 billion on the back of a 3.5% on-year rise in interest income to INR 272.96 billion. However, its other income fell 0.5% on year to INR 44.86 billion in Apr-Jun.
The bank's net interest income--the difference between interest earned and expended--for the quarter fell 3.2% on year to INR 91.13 billion. Net interest income was seen rising 1.2% on year to INR 92.96 billion in the quarter, according to the average of estimates by six brokerages.
The bank reported a 6.8% on-year growth in gross advances to INR 9.745 trillion as of Jun. 30. However, advances fell 0.9% on quarter.
Within loans, retail advances grew at the fastest pace, posting a year-on-year increase of 25.6% to INR 2.29 trillion. Micro, small and medium enterprises advances grew 17.7% on year to INR 1.44 trillion. Agriculture loans, meanwhile, fell 9.2% on year to INR 1.72 trillion as of Jun. 30.
Union Bank of India's global deposits were up 3.6% on year at INR 12.40 trillion as of Jun. 30. Of the total liabilities, the largest chunk comprised current account and savings account and retail term deposits. Current account and savings account deposits rose 0.9% on year to INR 4.03 trillion in the reporting quarter. The bank's current account, savings account ratio, however, edged lower to 32.52%, from 33.52% at the end of the previous quarter and 33.40% a year ago.
The bank's credit cost decreased 26 bps on year and 22 bps on quarter to 0.47% in the June quarter. The bank's cost of deposits rose to 5.53% in the June quarter from 5.36% year ago but declined from 5.61% in the previous quarter.
The bank's Basel-III capital adequacy ratio was at 18.30% as of Jun. 30. On Friday, shares of Union Bank of India ended 0.1% higher at INR 146.46 on the National Stock Exchange. End
Edited by Tanima Banerjee
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