Union Bank Shares Today Slide 7% Following Lackluster December Quarter; Nifty PSU Bank Index Down 3%

Union Bank shares plunged nearly 7% this morning following the release of the bank's business update for the December quarter in its Q3 FY25 results. Union Bank shares opened at Rs.123.81 this morning but gradually declined to Rs.115.78. Over the past five days, the stock has been volatile, registering a 1.92% loss. In the current month, the shares have dropped by 9.84%. Looking at the longer-term trend, the stock has fallen by 12.77% over the past six months.

Union Bank December Business Update

Union Bank of India's December business update reveals a mixed performance, with the public sector lender experiencing some challenges during the quarter. According to a CNBC report, the bank's overall business volume declined by 0.24% QoQ, although it showed a YoY growth of 4.7% due to relatively modest expansion over the past year.Domestic CASA (Current Account, Savings Account) deposits also saw a decline, with a drop of 0.23% QoQ and 0.44% YoY indicating a weakening in the bank's deposit base in these key categories, which are crucial for maintaining a low-cost funding structure.

On a positive note, Union Bank's overall deposits showed a year-on-year increase of 3.8%, reaching Rs.12.16 lakh crore, although they fell by 2% when compared to the September quarter. This decline in quarter-on-quarter deposits suggests a temporary dip in deposit growth, which contrasts with the bank's long-term trend of growth.

In terms of advances, the lender reported growth in both global and domestic advances. The global gross advances rose by 2.18% QoQ and 5.93% YoY, reaching Rs. 9.49 lakh crore. Similarly, domestic advances grew by 2.06% QoQ and 5.33% YoY, totaling Rs. 9.13 lakh crore. These gains indicate a healthy increase in loan disbursements, particularly on the domestic front, despite the challenges faced in the deposit segment.

Nifty PSU Bank Fell Sharply

The Nifty PSU Bank index saw a significant drop on Monday morning, with all 12 listed stocks under the index experiencing sharp declines. Union Bank of India emerged as the biggest loser, while the performance of other lenders in the sector was relatively stronger. While several banks had posted solid financial results for December, Union Bank reported weaker-than-expected performance.

Union Bank's shares plunged by nearly 7% in early trading, while Bank of Baroda followed closely with a 5% drop. Other banks, including Central Bank of India, Bank of Maharashtra, Punjab National Bank, Indian Overseas Bank, UCO Bank, and Bank of India, all saw their stock prices decrease by around 3% each on both the BSE and NSE. Even State Bank of India, one of the largest lenders in the country, saw its shares fall by approximately 1.47%. By noon, the Nifty PSU Bank index had collectively declined by around 3.72%, reflecting the widespread downturn across the sector.