Union Bank Shares Soar on Strong Q3 Earnings

Union Bank of India witnessed a sharp surge in its shares, rising over 6% in early trading, following the announcement of its Q3FY26 earnings. The public sector lender reported a robust net profit of ₹5,017 crore, driving investor optimism. At 1:15 pm, the bank’s stock traded 6.9% higher at ₹177 per share on the NSE.

Q3FY26 Financial Performance

Stable Net Interest Income

Union Bank of India posted stable earnings in the third quarter, with net interest income (NII) remaining largely steady at ₹9,328 crore, compared to ₹9,240 crore during the same period last year. The bank’s net interest margin (NIM) slightly declined to 2.76% from 2.91% in Q3FY25. On a sequential basis, NII grew 5.8% quarter-on-quarter, supported by steady interest income.

Improvement in Asset Quality

The bank demonstrated significant improvement in asset quality metrics. The gross non-performing assets (GNPA) ratio improved by 79 basis points to 3.06%, while net non-performing assets (NNPA) reduced by 31 basis points to 0.51%. This reflects stronger credit management and prudent lending practices.

Business Growth and Deposits

Expansion in Advances and Deposits

Union Bank’s total business grew 5.04% year-on-year, with gross advances increasing 7.13% YoY and total deposits rising 3.36% YoY. The bank’s total business as of December 31, 2025, stood at ₹22,39,740 crore, with a total deposit base of ₹12,22,856 crore.

Retail and MSME Lending Driving Growth

The retail segment was the key driver of growth, with retail advances surging 21.67% YoY. Micro, Small, and Medium Enterprises (MSME) advances also posted strong growth of 19.75% YoY. Overall, the retail segment contributed significantly to the bank’s expanding loan book.

Healthy Credit-Deposit Ratio

The bank’s credit-deposit (CD) ratio improved to 83.8 in Q3FY26 from 79.6 in Q2FY26, indicating effective utilization of deposits for lending while remaining comfortably within safe limits. Union Bank also maintained healthy margin growth by managing the cost of deposits efficiently.

Outlook

With robust profitability, improving asset quality, and strong growth in retail and MSME segments, Union Bank of India appears well-positioned to sustain momentum in the coming quarters. The positive market reaction reflects investor confidence in the bank’s strategic initiatives and financial health.

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Sorit Chaudhary

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