Earnings Review
Union Bank PAT down 10% YoY on fall in investment, other income
This story was originally published at 14:54 IST on 30 October 2025
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--Union Bank Jul-Sept net profit INR 42.49 bln
--Analysts saw Union Bank Jul-Sept net profit at INR 37.47 bln
--Union Bank gross NPA ratio 3.29% as on Sept 30 vs 3.52% qtr ago
--Union Bank Jul-Sept net profit INR 42.49 bln vs INR 47.20 bln year ago
--Union Bank net NPA ratio 0.55% as on Sept 30 vs 0.62% qtr ago
--Union Bank Basel III capital adequacy ratio 17.07% as on Sept 30
--Union Bank Jul-Sept total income INR 316.46 bln vs INR 320.36 bln year ago
--Union Bank Apr-Sept net profit INR 83.65 bln vs INR 83.99 bln year ago
--Union Bank Jul-Sept provisions INR 13.97 bln vs INR 17.12 bln year ago
--Union Bank Apr-Sept total income INR 634.27 bln vs INR 629.10 bln year ago
--Union Bank Jul-Sept NPA provisions INR 5.26 bln vs INR 25.04 bln year ago
--Union Bank provision coverage ratio 95.13% as on Sept 30
--Union Bank Jul-Sept net interest margin 2.67% vs 2.76% quarter ago
--Union Bank Jul-Sept net interest income INR 88.12 bln, down 3% on qtr
--Union Bank Jul-Sept credit cost 0.22% vs 0.47% quarter ago
--Union Bank global deposits INR 12.35 tln as on Sept 30, up 1.9% on year
By Vaishali Tyagi
MUMBAI – Union Bank of India reported a significant fall in its net profit for the September quarter due to a decline in income from investments and other income. Sequentially, however, the bank's bottom line rose. A sharp decline in provisions because of improving asset quality helped limit the fall in profit.
The lender's bottom line for Jul-Sept fell nearly 10% on year to INR 42.49 billion. Sequentially, the net profit rose over 3%. The state-owned bank's net profit was higher than analysts' expectations. The bank was expected to post a net profit of INR 37.47 billion for the September quarter, down nearly 21% on year.
The bank's other income fell over 6% year-on-year to INR 49.96 million in the September quarter. However, it rose over 11% sequentailly. A significant fall in income from invetsments also weighed on the bank's bottom line. Income from investments fell over 8% on year to INR 54.17 billion in the September quarter. Sequentially, it fell nearly 7%.
The total income of the bank fell over 1% on year to INR 316.46 billion in Jul-Sept, while it remained broadly flat on quarter. 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 100 basis points between February and June to 5.50%, ate into the lender's bottom line.
The bank's net interest margin fell 26 bps on year and 9 bps on quarter to 2.67% in Jul-Sept. The bank's net interest income--the difference between interest earned and expended--for the quarter fell 3.3% on quarter to INR 88.12 billion. The net interest income was expected to decline around 1% on year to INR 89.33 billion, according to the average of estimates by brokerages tracking bank's earnings.
The lender reported an improvement in its asset quality, which limited the fall in the bottom line. The state-owned bank's provisions and contingencies declined over 18% on year to INR 13.97 billion in the reporting quarter. Provisions for non-performing assets fell 79% on year to INR 5.26 billion. Its provision coverage ratio was 95.13 as of Sept. 30.
Fresh slippages in the September quarter fell to INR 19.85 billion from INR 49.46 billion a year ago. The bank wrote off INR 22.01 billion in the September quarter, which is higher than the INR 20.76 billion in the previous quarter and but sharply lower than INR 41.59 billion in the same quarter of last year.
The net slippage ratio of the bank was at 0.9% as of Sept. 30, sharply down from 2.4% a year ago. Union Bank's gross non-performing assets ratio fell to 3.29% from 3.52% a quarter ago. The net non-performing assets ratio was at 0.55% as on Sept. 30 against 0.62% a quarter ago.
The bank's credit cost fell to 0.22% in the September quarter from 0.47% a quarter ago. The Basel-III capital adequacy ratio was at 17.07% as of Sept. 30, against 18.30% a quarter ago. At 1342 IST, shares of Union Bank of India were down 2.7% at INR 142.20 on the National Stock Exchange.
For Apr-Sept, the bank's net profit was fell marginally to INR 83.65 billion from 83.99 billion a year ago. The bank reported a rise in its total income in Apr-Sept period to INR 634.27 billion from 629.10 a year ago.
On business front, Union Bank's deposits rose 1.9% on year to INR 12.35 trillion as on Sept. 30, while advances were at INR 9.75 trillion, up nearly 5%. Advances in retail, agriculture and micro, small, and medium enterprises segments increased 8.14% on year, with 23.98% growth in retail and 14.88% growth in MSMEs advances achieved on a yearly basis. The state-owned lender's return on assets and return on equity stood at 1.16% and 15.08%, respectively, in Jul-Sept. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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