Union Bank of India Q2 Results: Profit Jumps 30% to ₹5,537 Crore, Gross NPA Falls to 2.42%, Shares Rally Nearly 5%
State-owned lender Union Bank of India on October 19, 2026, announced its results for the second quarter (Q2FY27) ended September 2026. The bank’s standalone net profit rose 30.32% year-on-year to ₹5,537.20 crore, compared with ₹4,249.08 crore in the same quarter last year. On a consolidated basis, profit jumped 30.62% to ₹5,781.00 crore, against ₹4,425.95 crore in Q2FY26. Compared with the previous quarter (Q1FY27), when it stood at ₹5,332.30 crore, standalone profit grew 3.84% sequentially. For the first half of FY27 (H1FY27), standalone profit stood at around ₹10,870 crore.
- Standalone profit: ₹5,537.20 crore (+30.32% YoY)
- Consolidated profit: ₹5,781.00 crore (+30.62% YoY)
- NII: ₹10,583 crore (+20% YoY); NIM at 2.86%
- Gross NPA / Net NPA: 2.42% / 0.42%
- Gross advances up 18.53%, deposits up 6.87% YoY
- ROA / ROE: 1.38% / 17.21%
Income grows slowly, profit grows faster
Interestingly, the bank’s total income grew only modestly against the 30% jump in profit. Standalone total income rose 5.20% to ₹32,809.29 crore (from ₹31,186.38 crore a year ago), while consolidated total income rose 5.40% to ₹33,471.29 crore (from ₹31,755.44 crore). On a consolidated basis, interest income grew 8.3%, but interest expense rose only 2.1%, while other income fell 8.2%.
This showed up in net interest income. Standalone NII stood at ₹10,583 crore, about 20% higher than ₹8,812 crore a year ago, compared with ₹10,037 crore in Q1FY27. Net interest margin (NIM) improved to 2.86%, up 19 basis points year-on-year. Return on assets (ROA) of 1.38% and return on equity (ROE) of 17.21% are strong numbers for a public sector bank.
Asset quality: further improvement
Asset quality was the bank’s biggest highlight. The gross NPA ratio fell 87 basis points year-on-year to 2.42%, from 3.29% in September 2025. It was 2.65% in the June 2026 quarter. In absolute terms, gross NPAs declined to ₹27,916.21 crore from ₹32,085.13 crore. The net NPA ratio stood at 0.42%, better than 0.47% in Q1FY27, while the provision coverage ratio (PCR) remained at 95.20%.
On a standalone basis, provisions for NPAs were ₹596 crore, compared with ₹526 crore last year. However, total provisions and contingencies fell nearly 50% to ₹700.75 crore from ₹1,397 crore a year ago. This was a major reason behind the profit surge.
Loan growth strong, deposits lagging
On the business front, the bank’s total business grew 12.01% year-on-year to ₹24.75 lakh crore. Gross advances rose 18.53% to ₹11.56 lakh crore, while total deposits grew 6.87% to about ₹13.19 lakh crore.
Segment-wise, MSME advances grew the fastest at 22.39%. Retail advances rose 11.24%, and the RAM (Retail, Agriculture, MSME) portfolio grew 14.65%.
Why the deposit gap matters
Advances growth (18.53%) has moved well ahead of deposit growth (6.87%). If this gap persists, the bank may have to depend on costlier sources of funding, which could put pressure on net interest margin (NIM) going forward. That said, NIM in Q2 stood at 2.86%, better than 2.80% in Q1FY27. Competition for retail deposits is also intense, so deposit mobilisation will remain in focus in the coming quarters.
Comparison with recent quarters
This is the second consecutive quarter in which Union Bank’s profit growth stayed near 30%. In Q1FY27, standalone profit was ₹5,332.30 crore (+29.57% YoY), while in Q4FY26 it was ₹5,315.76 crore. On a consolidated basis, operating profit rose 19.1% to ₹8,150.96 crore and profit before tax rose 36.6% to ₹7,448.77 crore. Earnings per share rose to ₹7.57 from ₹5.80.
Impact on share price
After the results, Union Bank shares rose nearly 5% on the NSE on Monday. During the session, the stock traded around ₹179-180, against the previous close of ₹171.68. Meanwhile, the Nifty50 was down about 1%, meaning the stock outperformed the broader market.
What next?
Analysts will now watch three things: improvement in deposit growth, the NIM trend, and credit costs. If this asset quality trend continues and deposits keep pace with loan growth, the bank’s earnings could get further support.
Disclaimer: This article is for informational purposes only and is not investment advice. Please consult your financial advisor before making any decision.
