Union Bank of India (UNIONBANK) Q2 25/26 earnings summary

Executive summary

• Net profit for Q2 FY26 was ₹4,249 crore, with H1 FY26 net profit at ₹8,36,461 lakh (standalone) and ₹8,41,784 lakh (consolidated), showing stable performance year-over-year.

• Operating profit for Q2 FY26 was ₹6,814 crore; H1 FY26 at ₹13,72,261 lakh, reflecting a year-over-year decline.

• Digital transformation initiatives, including Vyom 2.0 and CBDC platform, enhanced customer engagement and operational efficiency.

• Strategic focus on sustainable growth, balancing top-line expansion, bottom-line strength, and prudent provisioning.

• Cautious reduction of high-cost bulk deposits by 21.85% YoY to support margins.

Financial highlights

• ROA at 1.16% for Q2 FY26 and 1.13% annualized for H1 FY26; ROE at 15.08%.

• Capital adequacy ratio at 17.07% (standalone), 17.70% (consolidated); CET1 at 14.37%.

• Gross NPA reduced to 3.29% (down 107 bps YoY); Net NPA at 0.55% (down 43 bps YoY); PCR at 95.13%.

• Net Interest Margin for Q2 FY26 at 2.67%; NII for Q2 FY26 was ₹8,812 crore.

• Retail advances grew 23.98% YoY; MSME up 14.88%; RAM segment advances up 8.14% YoY.

Outlook and guidance

• Aspires to achieve 9-10% growth in both assets and liabilities by March 2026, focusing on retail, MSME, and digital lending.

• NIM expected to stabilize or improve from Q3 onwards, assuming no further rate cuts.

• Focus on increasing CASA by 1-1.5 percentage points and maintaining CD ratio between 78.5%-80%.

• PSLC income expected to return next year at similar quantum to previous years.

• Cautious approach to credit growth in agriculture and overseas segments.