Banking & NBFCs · Daily brief

Union Bank of India Q2 Net Profit Jumps 30.3% YoY to ₹5,537 Crore on 20% NII Growth; Gross NPA Drops to 2.42%

State-owned Union Bank of India has delivered a robust financial performance for the second quarter ended September 30, 2026 (Q2 FY27), reporting a 30.31% year-on-year (YoY) growth in standalone net profit to ₹5,537 crore, compared with ₹4,249 crore in the corresponding quarter last financial year.

FINSAMUDRA DESK · 20 Oct 2026, 12:14 pm IST · 2 MIN

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The stellar bottom-line expansion was anchored by sustained core Net Interest Income (NII) momentum, a 19-basis-point margin expansion, and a near 50% reduction in credit provisioning costs.

Core Operating Metrics and Margin Resilience

During the quarter, Union Bank resisted broader industry margin headwinds:

Net Interest Income (NII): NII climbed 20.09% YoY to ₹10,583 crore (up from ₹8,812 crore in Q2 FY26).
Net Interest Margin (NIM): NIM improved by 19 bps to 2.86%, supported by disciplined liability pricing and asset repricing.
Operating Profit: Operating profit rose 18.99% YoY to ₹8,108 crore (vs. ₹6,814 crore).
Credit Provisions: Provisions and contingencies (excluding tax) fell sharply by 49.82% YoY to ₹701 crore (down from ₹1,397 crore in Q2 FY26).

Credit Distribution and Asset Quality Moat

The bank’s total global business expanded 12.01% YoY to reach ₹24.75 lakh crore, with global gross advances expanding 18.53% to ₹11.56 lakh crore and global deposits growing 6.87% to ₹13.19 lakh crore:

RAM Segment Leadership: Domestic advances expanded 17.35% to ₹11.06 lakh crore. The Retail, Agriculture, and MSME (RAM) book increased 14.65% to ₹6.36 lakh crore, spearheaded by a 22.39% YoY surge in MSME advances to ₹1.80 lakh crore.
Liability Profile: Domestic CASA deposits rose 14.65% YoY to ₹4.61 lakh crore, lifting the domestic CASA ratio to 34.93% (from 32.56%).
Asset Quality Metrics: Gross Non-Performing Assets (GNPA) contracted 87 bps YoY to 2.42% (₹27,916 crore), while Net NPAs contracted to 0.42% (₹4,768 crore). The Provision Coverage Ratio (PCR) stood at a fortified 95.20%.

Sources

Union Bank of India Q2 Net Profit Jumps 30.3% YoY to ₹5,537 Crore on 20% NII Growth; Gross NPA Drops to 2.42%

Core Operating Metrics and Margin Resilience

Credit Distribution and Asset Quality Moat

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