Union Bank of India's credit growth to pick up by end-Mar, says MD Pandey
This story was originally published at 16:09 IST on 14 January 2026
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--Union Bank MD: No plan to monetise stake in any subsidiary
--Union Bank MD: INR 42 bln provisions needed for expected credit loss norms
--Union Bank MD: Corporate loan pipeline at around INR 450 bln
--Union Bank MD: Expect credit growth to pick up by end of March
--CONTEXT: Comments from Union Bk of India mgmt in post-earnings press meet
--Union Bank CFO: Made conscious efforts towards reducing bulk deposits
MUMBAI – Union Bank of India expects its credit growth to accelerate by the end of March as the lender completes a balance-sheet rebalancing exercise and begins to deploy a strong corporate loan pipeline, the bank's top management said at a post-earnings press conference here on Wednesday. The state-owned bank currently has a sanctioned and pipeline corporate loan book of around INR 450 billion, which is expected to translate into disbursements over the coming quarters, Managing Director and Chief Executive Officer Asheesh Pandey said.
While the bank's credit growth has trailed system levels in recent quarters, this was largely due to a deliberate pruning of low-yielding assets, which will normalise going forward, he said. "We do expect credit growth to pick up by the end of March. The bank has already sanctioned close to INR 240–260 billion of corporate loans, with an additional pipeline of INR 400–450 billion at various stages," the MD said.
Management reiterated that the moderation in loan growth was by design, driven by an active balance-sheet reshuffling aimed at improving efficiency and profitability. Over the past few quarters, the bank has exited or run down low-yielding corporate exposures and interbank participation certificates, while redeploying capital towards relatively higher-yielding retail, agriculture and MSME segments.
Chief Financial Officer Avinash Prabhu said the bank has also made conscious efforts to reduce its reliance on bulk and high-cost deposits, even if that meant sacrificing short-term balance-sheet expansion. During the quarter, the bank shed roughly INR 400 billion of high-cost deposits while simultaneously growing its current account base by around INR 500 billion, resulting in a sharp improvement in deposit mix.
"Our focus has been on the quality and cost of deposits rather than headline growth. Reducing bulk deposits has helped improve margins and balance-sheet stability," the CFO said, adding that the bank remains comfortable on liquidity and regulatory ratios, including the credit-deposit ratio and liquidity coverage ratio.
The bank's global advances grew 7.1% on year to INR 10.17 trillion as of Dec. 31, while its deposits rose 3.4% to INR 12.22 trillion.
On margins, management said multiple measures—including deposit repricing and contraction of the treasury book have helped stabilise profitability. The bank reduced its treasury book by around INR 150 billion.
Union Bank has estimated it will need additional provisions of around INR 42 billion to meet the expected credit loss requirements, a gap the management described as "comfortable and manageable." Banks will have to adopt the Reserve Bank of India's proposed expected credit loss framework by FY27. "The required provisions under the draft ECL norms are well within reach. With existing buffers and internal accruals, this is not a concern for us," Pandey said.
On capital planning, the management said Union Bank has board approval to raise up to INR 60 billion through various instruments, but is in no hurry, given comfortable capital adequacy and strong internal capital generation. Any capital raising would be timed based on market conditions and growth requirements.
On speculation about plans to monetise some subsidiaries, Pandey ruled out any immediate divestment of stakes in group entities. "There is no plan at this stage to monetise our stake in any subsidiary. These businesses are strategic, and we remain committed shareholders," he said, even as other banks explore listings and stake sales to unlock value.
Looking ahead, management said growth will be driven by a mix of retail, MSME and a gradual revival in corporate lending, with the bank aiming to maintain a balanced portfolio over the medium term. "Efficiency in deployment of funds, customer-centricity and risk discipline remain our guiding principles. Growth will follow as a natural outcome," Pandey said.
Union Bank's net profit for the December quarter rose nearly 9% on year to INR 50.17 billion, beating the analysts' expectations. Sequentially, the net profit rose by over 18%. Wednesday, the bank's shares ended 7.9% higher at INR 179.27 on the National Stock Exchange. End
Reported by Kabir Sharma
Edited by Saji George Titus
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