Union Bank's Q4 Financial Performance

Union Bank of India has announced a remarkable 50% year-on-year increase in its net profit for the March quarter, reaching Rs 4,985 crore. This surge is attributed to enhanced non-interest income and reduced provisions.

Challenges Ahead

Despite the positive results, the bank expressed concerns over potential pressure on net interest margins (NIMs) due to anticipated rate cuts by the Reserve Bank of India. With 29% of its loan book linked to the repo rate, the bank anticipates margin strain as interest rates decline.

Financial Highlights

Total income saw an increase to Rs 33,254 crore from Rs 31,058 crore in the previous year. However, loan growth for FY25 was 8.62%, missing the target range of 11-13%. Non-interest income rose by 18% to Rs 5,559 crore, and provisions were reduced by 16% to Rs 2,715 crore.

Operational and Strategic Focus

The bank is focusing on operational readiness, including vigilance in border areas and ensuring cash availability in branches and ATMs. Union Bank's CEO emphasized a commitment to balancing profitability with sustainable growth, though no credit growth guidance for FY26 was provided.

Shares of Union Bank were trading 6.28% higher at Rs 122.70 on the BSE, showcasing strong investor confidence.