Mumbai, January 14, 2026, 21:12 IST
- Union Bank of India’s quarterly profit climbed 9% year-on-year, supported by a decline in bad-loan ratios.
- Net interest margin fell year-on-year, despite core interest income remaining largely unchanged.
- After the numbers came out, the stock jumped roughly 7% in afternoon trading.
Shares of state-run Union Bank of India jumped nearly 7% Wednesday after the lender posted higher December-quarter profits alongside better asset quality. The stock was up about 6.9% at 177 rupees on the NSE in afternoon trading, according to Upstox data. 1
These results are crucial as investors have increasingly turned to public-sector lenders for their cleaner balance sheets following an extended clean-up phase. Yet, the challenge has shifted to funding: deposit growth has trailed loan growth at many banks, tightening margins amid fierce competition for savings.
Union Bank reported a 9% jump in net profit to 50.17 billion rupees ($603 million) for the quarter ending Dec. 31, 2025. Net interest income — the gap between interest earned on loans and interest paid on deposits — inched up 1% to 93.28 billion rupees, according to a regulatory filing. 2
Net interest margin, a crucial measure of lender profitability, dropped to 2.76% from 2.91% a year ago, according to data referenced by Upstox. For clarity, a basis point equals one-hundredth of a percentage point.
Asset quality got better. Gross non-performing assets (NPAs)—loans overdue by more than 90 days—dropped to 3.06% of advances. Net NPAs also fell, down to 0.51% as of Dec. 31, 2025, according to the filing.
Business growth showed a mixed picture. Union Bank posted roughly 5% year-on-year growth in total business, with gross advances climbing just over 7%, while deposits edged up about 3% as of Dec. 31, 2025.
The bank’s credit-deposit ratio climbed to 83.8 from 79.6 last quarter, Upstox reported, driven by faster loan growth compared to deposits. While a higher ratio can boost earnings when conditions are favorable, it also puts pressure on the bank to increase deposits without resorting to much higher interest rates.
State-run lenders continue rolling out their December-quarter results this week, offering fresh data on margins and bad loans. Bank of Maharashtra posted a 26.5% increase in quarterly profit alongside a 16% rise in net interest income, according to Economic Times. 3
Yet, the margin remains the key variable. If deposit costs hold firm and loan yields slide, profits could take a hit—even if asset quality stays steady—especially at banks focused on expanding retail lending.
