Union Bank of India FY26 Net Profit Hits ₹18,697 Cr; Board Recommends ₹5 Dividend, NPAs Fall to 2.82%
Total business of the bank reached ₹23.85 lakh crore, marking a growth of 5.78% year-on-year
Union Bank of India on Thursday reported a steady financial performance for FY26, with net profit rising to ₹18,697 crore and the Board recommending a dividend of ₹5 per equity share, subject to shareholder approval.
The public sector lender’s results reflect improved asset quality, healthy credit growth, and strong capital buffers, although margins remained under pressure during the year.
Profit, Dividend and Income
The bank posted a net profit of ₹18,697 crore in FY26, registering a growth of about 3.9% over the previous financial year.
For the March quarter (Q4FY26), net profit rose to around ₹5,316 crore, reflecting moderate growth on a year-on-year basis.
The Board recommended a dividend of ₹5 per equity share (face value ₹10) for FY26, reinforcing its commitment to shareholder returns.
Interest income for the full year remained stable at over ₹1.05 lakh crore.
Business Growth Remains Steady
Total business of the bank reached ₹23.85 lakh crore, marking a growth of 5.78% year-on-year.
- Gross advances: ₹10.78 lakh crore (↑ 9.74%)
- Deposits: ₹13.06 lakh crore (↑ 2.72%)
Credit growth outpaced deposit growth, indicating stronger lending traction across segments.
Retail, MSME Lead Growth
The bank continued to see momentum in its Retail, Agriculture and MSME (RAM) portfolio:
- RAM advances grew 12.56% YoY
- Retail advances rose 16.75%
- MSME advances surged 18.75%
RAM now accounts for 57.49% of domestic advances, highlighting a shift towards granular lending.
Asset Quality Improves Significantly
Asset quality strengthened further during FY26:
- Gross NPA: declined to 2.82% (↓ 78 bps YoY)
- Net NPA: improved to 0.48% (↓ 15 bps YoY)
The improvement reflects sustained recovery efforts and tighter credit monitoring.
Capital Position Remains Strong
The bank maintained robust capital adequacy:
- CRAR: 18.10%
- CET-1 ratio: 15.69%
These levels provide sufficient headroom for future credit expansion.
Margins Under Pressure
Despite stable earnings, profitability ratios saw some moderation:
- Net Interest Margin (NIM) declined to 2.70%
- Operating profit fell on a yearly basis
Rising cost pressures and lower yields impacted margins during the year.
Financial Inclusion Push Continues
The bank expanded its outreach under key government schemes:
- PMJDY accounts: 3.40 crore with deposits of ₹15,964 crore
- Strong enrollments under PMJJBY, PMSBY, and APY
It also strengthened focus on women entrepreneurship and green financing, including renewable energy and electric mobility lending.
Outlook
Union Bank of India has delivered a balanced FY26 performance, marked by:
- Improved asset quality
- Strong retail and MSME growth
- Comfortable capital position
However, margin pressures and operating costs remain key areas to watch in FY27 as the bank looks to sustain profitability while expanding its loan book.
