Union Bank hits record ₹5,332 cr profit, NIM widens to 2.80%
Management details ECL provision of ₹11,500 cr phased over four years, sheds high-cost deposits to lift NIM, and targets credit growth at industry-plus-1%.
— 6 earlier stories on Union Bank Of India →What's new
- Record quarterly net profit of ₹5,332 cr, up 29.6% YoY
- NIM expands to 2.80%, helped by 18 bps drop in cost of deposits
- ECL transitional requirement estimated at ₹11,500 cr, with ₹800 cr already provisioned
Why this matters
Union Bank's record profit and NIM improvement show that shedding high-cost deposits and maintaining asset quality are paying off. The phased ECL provision over four years limits near-term capital strain, allowing the bank to target industry-leading credit growth.
What we're watching
- Phasing of the remaining ECL provision over four years
- Reduction in bulk deposit dependence to ~15%
- Credit growth relative to industry — guided at industry+1%
The full read
Union Bank of India posted its highest-ever quarterly net profit of ₹5,332 crore in Q1 FY27, up 29.6% YoY. Net interest margin improved to 2.80% as the bank deliberately shed high-cost bulk deposits, cutting the cost of deposits by 18 basis points. Asset quality also improved, with gross NPAs falling to 2.65%. Management quantified the expected credit loss (ECL) transition requirement at about ₹11,500 crore, of which ₹800 crore is already provisioned, and signalled a phased approach over four years to smooth the capital impact. Credit growth is targeted at industry plus 1%, and the bank aims to reduce bulk deposit dependence to around 15% over time. The transcript adds colour to the headline numbers: a management team focused on protecting NIM, strengthening the liability franchise, and prudent provisioning.
Questions answered
- What drove Union Bank's record Q1 profit?
- Net profit rose to ₹5,332 crore, driven by NIM improvement to 2.80%, lower cost of deposits (down 18 bps), and improved asset quality with GNPA at 2.65%.
- How is the bank managing the ECL transition?
- The total ECL requirement is about ₹11,500 crore. ₹800 crore is already set aside, and the bank expects to phase the impact over four years, which limits the hit to capital.
- What is the bank's deposit strategy?
- Union Bank is shedding high-cost bulk deposits, which reduced the cost of deposits by 18 bps and lifted the credit-deposit ratio to 86%. The goal is to cut bulk deposit dependence to ~15% over time.
- How does credit growth guidance compare to industry?
- Management guided for credit growth at the industry rate plus one percentage point, reflecting confidence in loan demand and market share gains.
- What is the new ecosystem banking vertical?
- The call mentioned a new ecosystem banking vertical, but no further details were provided in the transcript.
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All notes on UNIONBANK →- 21 Jul 2026 · 6:46 PM IST Union Bank hits record ₹5,332 cr profit, NIM widens to 2.80%
- 13d ago Union Bank Q1 profit jumps 30% to ₹5,332 cr; asset quality improves
- 13d ago Union Bank profit rises 30% to ₹5,332 cr in Q1
- 13d ago Union Bank Q1 profit jumps 30% to ₹5,332 cr
- 26d ago Union Bank deposits lag loans; CD ratio jumps 714 bps in Q1