Union Bank's Q1 profit rises 12%, stock falls 4%
What's the story
Shares of Union Bank of India fell nearly 4% to ₹140.80 on the BSE today. This comes after the public sector lender posted a 12% year-on-year (YoY) increase in net profit for Q1 FY26. The bank's net profit rose to ₹4,115.5 crore in the June quarter from ₹3,679 crore in the same period last year. However, analysts had expected a higher figure of around ₹4,245 crore for this period.
Financial performance
Total income increases to ₹31,791 crore
Union Bank's total income also increased to ₹31,791 crore in the June quarter from ₹30,874 crore a year ago. The bank's total business witnessed a 5% growth to ₹22.14 lakh crore, up from ₹21.08 lakh crore at the end of June 2024. However, net interest income (NII) saw a decline of 3.2% YoY to ₹9,112.6 crore from ₹9,412 crore last year.
Financial adjustments
Provisions and contingencies rise
The bank's provisions and contingencies rose to ₹1,664.5 crore in Q1 FY26 from ₹1,543.9 crore in the March quarter. Provisions for non-performing assets (NPAs) declined to ₹1,152 crore from ₹1,675.7 crore in Q4 FY25. Last month, Union Bank had cut its lending rates by 50 basis points across the board on EBLR and RLLR for retail and MSME borrowers.
Stock analysis
Union Bank shares have gained 15% year-to-date
Union Bank's shares have gained 15% year-to-date and are up 30% over the past six months. The bank's market capitalization is currently at ₹1.08 lakh crore. According to Trendlyne, the average target price for Union Bank shares is ₹152, indicating a potential upside of nearly 7% from current levels. Of the 13 analysts tracking the stock, the consensus rating is 'Buy.'