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Informist, Wednesday, Jan. 14, 2026

 

--Union Bank:  Expect better loan book growth in Jan-Mar

--Union Bank: To continue working on improving CASA ratio

--Union Bank: Expect NIMs to improve in coming quarters

 

By Shruti Nair and Sagar Sen

 

MUMBAI – Union Bank of India's net interest margin is likely to improve further in the Jan-Mar quarter due to repricing of deposits, its management said Wednesday. The bank's net interest margin improved to 2.76% in the December quarter from 2.67% a quarter earlier.

 

Addressing a post-earnings analyst call, the bank's management said it expected NIM to rise in the coming quarters due to the repricing of deposits after the maturity of high-cost deposits. In December, the Reserve Bank of India cut its benchmark repo rate by 25 basis points to 5.25%, taking the cumulative reduction in 2025 to 125 bps.

 

Management said it was working to increase the current account savings account ratio. In the December quarter, the bank's domestic CASA ratio increased by 140 bps on quarter and 53 bps on year to almost 34%.

 

The bank's net profit in Oct-Dec rose nearly 9% on year to INR 50.17 billion, beating analyst expectations by a wide margin. The rise was due to a steep decline in the bank's provisions, which fell over 80% on year to INR 3.22 billion. Sequentially, the bank's provisions fell by about 77%.

 

Management said the decline in provisions was due to adequate relief from recoveries and upgrades. "There were limited requirements for provisions, that is why our credit cost and provision requirements have come down", the management said. The bank's management also said it would work to contain slippages going forward. Furthermore, the new labour codes would not significantly alter the bank's provisions, as their impact would largely be limited to younger banks.

 

Credit costs have significantly declined to 0.09% for the December quarter, down 54 bps on year and 13 bps sequentially. On the impact of the proposed expected credit loss framework, management said, "We are not expecting too much of a change in terms of our current credit cost versus the expected under expected credit loss."

 

In the December quarter, the bank's advances in the retail, agricultural, and micro small and medium segments grew over 11% on year and over 4% sequentially, while corporate loans rose over 5% on year and over 4% sequentially. Regarding the credit portfolio mix, the bank will focus on the RAM (retail, agriculture and MSME) business, the management said.

 

Thursday, the bank's shares ended 7.9% higher at INR 179.27 on the National Stock Exchange.  End

 

Edited by Saji George Titus

 

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