Shares of Union Bank of India rise 8% after third-quarter results show decline in bad loans and steadier profits

Shares of Union Bank of India rose as much as 8.3% to Rs 180 on the BSE on Wednesday after the state-owned lender reported a December performance that reflected an improvement in asset quality and steadier profits, with a 9% year-on-year rise in net profit and a sequential improvement in bad loans, easing concerns over slippages and credit stress.The bank reported a loss of Rs 1,853 crore at the end of the December quarter, compared to Rs 2,151 crore in the September quarter.

Gross non-performing assets subsequently declined to 3.06% from 3.29%, while net NPAs improved to 0.51% from 0.55% in the previous quarter. In absolute terms, gross NPAs fell to Rs 31,121 crore from Rs 32,085 crore at end-September, and net NPAs fell to Rs 5,102 crore from Rs 5,209 crore.On a year-on-year basis, the bank said gross NPAs have declined by 79 basis points and net NPAs by 31 basis points as of December 31, 2025.

For the third quarter ended December 31, 2025, Union Bank reported a net profit of Rs 5,017 crore, compared to Rs 4,604 crore a year earlier, according to a regulatory filing. Net interest income, the core income, rose 1% year-on-year to Rs 9,328 crore, compared to Rs 9,241 crore in the corresponding quarter last year.

The modest NII growth reflected slower deposit expansion, even as claims continued to grow at a healthier pace.

Loan growth is outpacing deposits

As of December 31, 2025, the bank’s total operations stood at Rs 22,39,740 crore, up 5.04% from a year earlier. Gross advances rose 7.13% year-on-year, while global deposits rose 3.36% to Rs 12,22,856 crore.

The difference between loan and deposit growth is a broader theme in the banking industry, one that is closely watched by investors as interest rates and liquidity conditions evolve.

The capital position remains strong

Union Bank also reported comfortable capital buffers. The capital to risk-weighted assets ratio stood at 16.49% at the end of December 2025, while the common equity Tier 1 ratio improved to 13.94%, compared to 13.59% a year earlier.

Thanks to improving asset quality, stable profitability and ample capital, Union Bank of India has emerged as a key stock on the buy lists of public sector investors, a trend that was sharply reflected in Wednesday’s rally.

(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of the Economic Times)