Union Bank of India Q2 net profit surges 30% to ₹5,537 crore as margins expand

Strong earnings growth in Q2

State-owned Union Bank of India reported a 30 per cent year-on-year rise in standalone net profit to ₹5,537 crore for the September quarter, driven by higher net interest income, expanding operating margins, and a steep drop in loan loss provisions.

Net interest income for the lender grew 20 per cent to ₹10,582 crore compared with the same period last year. The earnings performance underlines the sustained health and credit strength of India's public sector banking industry, which continues to support capital investment and small business growth across the country.

Key performance comparison

Broad-based loan growth and margin outlook

Advances across the bank's global balance sheet grew by nearly 19 per cent year-on-year to ₹11.6 lakh crore. Growth was led by a 24 per cent increase in corporate lending to ₹5.2 lakh crore, alongside a 22.4 per cent expansion in loans to micro, small, and medium enterprises. The bank confirmed it holds an active corporate loan pipeline of ₹1 lakh crore.

Chief executive officer Asheesh Pandey said the bank aims to lift its net interest margin beyond 3 per cent by the next fiscal year. Provisions nearly halved to ₹701 crore from ₹1,397 crore a year earlier, with the bank's provision coverage ratio remaining above 95 per cent.

Improving asset quality

Asset quality metrics improved across the board. The gross non-performing asset ratio fell by 87 basis points year-on-year to 2.42 per cent, while the net non-performing asset ratio dropped to around 0.4 per cent.

Management clarified that the total additional provisioning required for the expected credit loss transition stands at around ₹5,500 crore, or 70 basis points of Common Equity Tier 1 capital.

Brokerage firm Systematix Institutional Equities raised its price target on Union Bank of India to ₹215 while maintaining a buy rating, noting that quarterly profits exceeded its estimates. The lender's shares have gained 300 per cent over the past five years, reflecting market confidence in the nation's public banking sector.