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Union Bank Q1 net up 11.9% at Rs 4,116 crore driven by lower provisions
Net interest Income declined by 3.18 per cent Y-o-Y to Rs 9,113 crore in Q1FY26, compared to Rs 9,412 crore in Q1FY25. Net interest margin (NIM) moderated by 29 basis points to 2.76 per cent in Q1FY26 from 3.05 per cent in Q1FY25.
Nitesh Rajan, executive director, Union Bank said the moderation in margin is a reflection of cut in lending rates on floating rate loans after RBI reduced policy repo rates.
The overall impact on NIM is expected to be 20-25 basis points in the current financial year (FY26) and there will be some moderation in the second quarter ending September 2025, Ranjan said in the post-result media conference. He, however, did not give any guidance for FY26 NIM level.
The bank's non-interest income declined by 0.52 per cent Y-o-Y to Rs 4,486 crore in Q1FY26. Provisions for non-performing assets (NPAs) declined to Rs 1,152 crore in Q1FY26 from Rs 1,651 crore in Q1FY25.
Advances grew by 6.83 per cent Y-o-Y to Rs 9.74 trillion in Q1FY26. Retail advances grew by 17.65 per cent Y-o-Y to Rs 1.44 trillion in the June quarter of FY26. The corporate credit grew by three per cent.
Total deposits increased 3.63 per cent Y-o-Y to 12.39 trillion. The share of low-cost deposits—current account and savings account (CASA)— in domestic operations moderated to 32.52 per cent at the end of June 2025 from 33.4 per cent a year ago.
The bank's asset quality improved, with gross NPAs declining to 3.52 per cent in June 2025 from 4.54 per cent in the same period last year. Net NPAs also declined from 0.62 per cent in June 2024 to 0.90 per cent in June 2025. The provision coverage ratio (PCR), including written-off accounts, stood at 94.65 per cent in June this year, as against 93.49 per cent in June 2024.
The bank's capital adequacy stood at 18.30 per cent, with Tier-I capital at 17.02 per cent at the end of the quarter. Although the bank has board approval for an equity offering of Rs 3,000 crore, there are no firm plans for capital raising at present.
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