Union Bank of India Q1 Results: Net Profit Rises 12% On Strong Interest Income; Asset Quality Strengthens

On Saturday, July 19, Union Bank of India announced its first quarter (Q1) financial results, which ended on June 30, 2025. Due to higher interest income and superior asset quality, Union Bank of India produced a strong performance in Q1FY26, posting an 11.87% year-on-year boost in net profit, which came to Rs 4,116 crore.

Union Bank of India reported a mixed performance in its earnings growth for the first quarter of FY26. At Rs 27,296 crore, interest income climbed by 3.53% year on year (YoY) despite a modest quarter-on-quarter (QoQ) dip of 1.44%. However, non-interest income fell sharply to Rs 4,486 crore, down 19.31% QoQ and 0.52% YoY.

With a modest increase from QoQ and a 7.26% rise from YoY, interest expenditure was stable at Rs 18,183 crore, reflecting growing deposit costs. As a result, a narrowing interest margin and a rise in the cost of funds caused Net Interest Income (NII) to drop by 4.22% QoQ and 3.18% YoY to Rs 9,113 crore.

Operating profit for the bank was Rs 6,909 crore, down 10.28% QoQ and 11.26% YoY. This indicates concerning issues related to its core business operations. According to Union Bank, its operating expenses dropped 9.27% on a quarter-on-quarter basis but were up 9.02% on a year-on-year basis to Rs 6,690 crore.

With retail lending up 25.63% and MSME loans up 17.65%, the bank's RAM (Retail, Agriculture, MSME) division continued to be a significant growth driver, with a 10.34% YoY growth. With net NPA at only 0.62% and gross NPA down to 3.52% (down 102 bps YoY), asset quality significantly improved.

With Return on Equity (RoE) at 15.15 percent and Return on Assets (RoA) at 1.11%, key ratios demonstrated sound fundamentals. Additionally, CRAR grew to 18.30 percent and CET-1 was at 15.30 percent, indicating solid capital adequacy.

According to Union Bank of India, its total business rose by 5.01% YoY, with gross advances rising 6.83% and total deposits growing 3.63%. As of June 30, 2025, the bank's total business was Rs. 22,14,422 crores. With 8,649 branches, 8,976 ATMs, and more than 24,900 business correspondent (BC) sites, Union Bank's countrywide presence has grown even more.