Union Bank Q3 net rises 9% to ₹5,017 crore, aided by decline in provisions

Union Bank of India posted a 9 per cent rise in December-quarter net profit as provisions dropped sharply, even as net interest margins declined and deposit growth moderated

State-owned Union Bank of India on Wednesday reported a 9 per cent year-on-year rise in net profit to Rs 5,017 crore for the quarter ended December 31, 2025, aided by a decline in provisions. 

Net interest income — the difference between interest earned and interest expended — grew just 1 per cent to Rs 9,328 crore from Rs 9,241 crore in the same quarter of FY25. 

Non-interest income rose 2.82 per cent to Rs 4,541 crore during the quarter. Net interest margin for the period was 2.76 per cent, compared with 2.91 per cent a year ago. 

Provisions and contingencies fell nearly 80 per cent to Rs 322.23 crore in the December quarter of FY26 from Rs 1,599.05 crore a year earlier. Provisions for non-performing assets declined 84 per cent to Rs 235 crore. 

Asheesh Pandey, managing director and chief executive officer of the bank, said the decline in provisioning was due to lower slippages. Slippages fell to Rs 1,853 crore in the December quarter from Rs 2,151 crore in the September quarter. 

Fresh slippages during the quarter were Rs 1,660 crore, compared with Rs 1,820 crore in the same period last year. 

Pandey said the bank has identified a gap of Rs 4,200 crore between its existing provisions and those required under the expected credit loss-based framework, which will be implemented in phases from April 1, 2027. 

Asset quality improved during the quarter, with gross non-performing assets declining by 79 basis points year-on-year to 3.06 per cent, while net non-performing assets fell by 31 basis points to 0.51 per cent as of December 31, 2025. 

The bank’s global advances increased 7.13 per cent year-on-year to Rs 10.16 trillion, while total deposits rose 3.36 per cent to Rs 12.23 trillion. Deposits shrank nearly 1 per cent on a sequential basis. 

Pandey said deposit growth moderated after the bank reduced bulk deposits by over Rs 40,000 crore, while credit growth was affected by the sale of around Rs 20,000 crore through the inter-bank participation certificates market. 

He said the bank’s strategy prioritises profitability over balance-sheet expansion. The capital-to-risk-weighted assets ratio stood at 16.49 per cent, while the common equity tier-1 ratio rose to 13.94 per cent from 13.59 per cent a year earlier.