Union Bank Of India Achieves 28.2% Increase In Net Profit For Q3 2024, Indicating Strong Financial Health

On Monday, Union Bank of India, a government-owned financial institution, announced a significant rise in its net profit for the quarter ending December 31, 2024. The bank's net profit surged by 28.2% year-on-year to ₹4,603.6 crore from ₹3,589.9 crore recorded in the same quarter of the previous fiscal year, as disclosed in a regulatory filing. This growth is indicative of the bank's enhanced profitability and financial health during the period.

In the latest quarter, the bank's Net Interest Income (NII), a critical financial metric indicating the difference between earned interest and paid interest, saw a modest increase of 0.8%. The NII reached ₹9,240.2 crore compared to ₹9,168 crore in the corresponding quarter of the previous fiscal year. This slight uptick reflects a stable income from the bank's core lending and borrowing operations.

Further enhancing its financial stability, Union Bank of India reported a decrease in its non-performing assets (NPAs). The Gross NPA ratio improved to 3.85% in the December quarter from 4.36% in the September quarter, while the Net NPA ratio saw a reduction to 0.82% from 0.98% quarter-on-quarter. In absolute terms, Gross NPA was ₹36,554.3 crore, down from ₹40,498.9 crore, and Net NPA was at ₹7,568.4 crore, decreasing from ₹8,758.6 crore in the previous quarter. The bank also managed to lower its provisions to ₹1,599.1 crore from ₹1,712.2 crore quarter-on-quarter, further underlining its improving asset quality.

The bank's global deposits experienced a year-on-year growth of 3.76%, reaching ₹12,16,562 crore as of December 31, 2024. This growth contributed to the bank's total business expansion of 4.70% year-on-year, with gross advances up by 5.94%, culminating in a total business size of ₹21,65,726 crore. The Retail, Agriculture, and MSME (RAM) segment saw a notable growth of 9.26% year-on-year, highlighted by a 16.36% increase in retail advances, 4.34% in agriculture loans, and 6.34% in MSME advances. This segment now represents 56.69% of the bank's domestic advances, indicating a diversified and healthy loan portfolio.

Capital adequacy ratios of the bank have also improved, with the CRAR (Capital to Risk (Weighted) Assets Ratio) climbing to 16.72% and the CET1 (Common Equity Tier 1) ratio reaching 13.59%, up from 15.03% and 11.71% respectively in the previous year. These ratios are essential indicators of the bank's financial strength and its ability to absorb potential losses.

The bank's profitability metrics witnessed significant enhancement in the third fiscal quarter of 2025. The Return on Assets (ROA) increased by 23 basis points year-on-year to 1.30%, and the Return on Equity (ROE) escalated by 50 basis points year-on-year to 17.75%. These improvements reflect the bank's effective management and operational efficiency.

Despite the positive financial results, Union Bank of India's shares experienced a slight downturn, closing at ₹105.65, which is a 1.49% decrease, at the end of the trading day. This movement occurred after the market had closed, marking the end of a notable quarter for the bank.