MUMBAI, Jan 14, 2026, 13:58 IST
- Union Bank of India shares rise nearly 8% and touch a five-year high after Q3 results
- Q3 net profit climbs 9% to 5,017 crore rupees; net interest income edges up 1%
- Gross bad-loan ratio falls to 3.06%; net bad-loan ratio improves to 0.51%
Union Bank of India share price jumped nearly 8% on Wednesday and hit a five-year high after the state-run lender reported higher third-quarter profit and a drop in bad loans. The stock was up 7.95% at 179.40 rupees by 1:38 p.m. IST.
The numbers land in the thick of India’s December-quarter earnings season, when bank results tend to swing the broader market. Traders are watching loan growth, deposit flows and early signs of stress in retail portfolios as rates move and competition for deposits stays tight.
Analysts have said loan demand improved into the quarter, but the funding side is where pressure can build. “NII is likely to see a sequential uptick in the December quarter, driven by better loan growth,” said Vishal Narnolia, assistant vice-president of research at ICICI Securities.
Union Bank said net profit rose 9% from a year earlier to 5,017 crore rupees for the quarter ended Dec. 31, 2025, while net interest income — the gap between interest earned on loans and paid on deposits — increased 1% to 9,328 crore rupees. Gross non-performing assets, a measure of bad loans, fell 79 basis points (0.79 percentage point) year-on-year to 3.06%, while net NPAs declined 31 basis points to 0.51%, the bank said in a filing.
The rally in Union Bank came with a broader bid in state-run lenders. The Nifty PSU Bank index was up about 2% in afternoon trade, with Indian Overseas Bank and Punjab National Bank also higher, according to market data.
Other public-sector lenders have also been reporting upbeat December-quarter prints. Bank of Maharashtra on Tuesday posted a 26.5% rise in quarterly profit to 1,779 crore rupees, with net interest income up 16%, according to the company’s earnings report carried by local media.
But the tape can turn fast in bank results. If deposit growth keeps lagging loan growth, lenders may have to pay more to raise funds, which can squeeze core earnings even when credit demand looks fine. A pickup in slippages — fresh loans turning bad — would also test the market’s optimism.
For Union Bank, investors will be looking past the headline profit growth to the mix underneath it: whether loan expansion holds up, how sticky deposit growth is, and whether the improvement in asset quality carries into the next quarter.
