This article first appeared on GuruFocus .
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Average CASA:INR 24,000+ crores maintained during the quarter.
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Average RTD:INR 17,000 crores maintained during the quarter.
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Total Deposits:Combined CASA and RTD of INR 41,000 crores.
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Capital Base:18.46% robust capital.
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ROA:Maintained at 1.36% for the last three quarters.
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Cost to Income Ratio:Reduced by 500 basis points.
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Operating Profit (OP):Exceeded INR 8,000 crores.
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Net Interest Income (NII):Surpassed INR 10,000 crores.
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SMA-01 to Above INR 5 Crores:Reduced to around INR 2,800 crores.
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Deposit Cost:Reduced by 18 basis points.
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Release Date: July 15, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Union Bank of India ( BOM:532477 ) reported the highest ever profit for the quarter, maintaining a strong ROA of 1.36% over the last three quarters.
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The bank has successfully reduced its cost of deposits by 18 basis points, contributing to an improved NIM of 2.80%.
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The bank's capital adequacy ratio stands robust at 18.46%, providing a strong foundation for future growth.
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Union Bank of India has maintained a strong CASA ratio, with an average of INR 24,000 crores, supporting low-cost deposit growth.
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The bank has received several awards for excellence in governance, compliance, and cybersecurity, highlighting its commitment to operational excellence.
Negative Points
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There is a significant gap between deposit and loan growth, with concerns about the bank's ability to bridge this gap to match sector levels.
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The bank's recovery from written-off accounts has decreased compared to the previous quarter, raising concerns about asset quality.
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Provisions for NPAs have increased significantly to INR 1,020 crores, indicating potential stress in certain loan segments.
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The SMA-2 numbers have increased by INR 850 crores, suggesting rising stress in some accounts, particularly in the MSME sector.
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The bank faces challenges in maintaining growth momentum, with concerns about its ability to match the industry's credit growth rate of 18-19%.
Q & A Highlights
Q: Can you explain the current gap between deposit and loan growth, and when do you expect deposit growth to pick up? Also, what is the status of FCNR mobilization? A: The gap is primarily due to our focus on CASA and RTD deposits rather than bulk deposits. We have a strong capital base and are working on improving efficiency. We have mobilized USD 106 million in FCNR and aim to reach USD 1.5 to 2 billion by September.
Q: What are your plans to improve overall business growth, especially in terms of credit and deposit growth? A: We are focusing on CASA and retail term deposits for sustainable growth. We have a pipeline of over INR 1 lakh crore in corporate sanctions and are introducing new schemes in MSME and agriculture sectors. We aim for 18-20% growth in these sectors.
Q: There seems to be a concern about recovery and NPA provisions. Can you elaborate on the current situation and future outlook? A: Recovery is in line with expectations, and we are managing MSME stress well. We have disbursed INR 10,000 crores under ECLGS and are proactively engaging with MSME customers to mitigate stress. We have also set aside INR 800 crores for future provisions.
Q: Can you provide details on the impact of ECL provisions and your strategy for managing them? A: The total ECL provision requirement is around INR 11,300 crores, with INR 5,500 crores already covered. We plan to manage the remaining INR 6,000 crores over the next few quarters, ensuring sustainable growth and profitability.
Q: What is your outlook on NIM improvement and the factors driving it? A: We aim to improve NIM by focusing on higher-yielding portfolios and reducing the cost of funds. Our domestic yield on advances is 8.01%, and we expect further improvement as we optimize our funding strategy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
