Union Bank of India Q2 Results October 19, 2026: Profit Jumps 30% to ₹5,537 Crore as NPAs Shrink

Union Bank of India Q2 results gave PSU bank investors something to cheer on Monday. The state-run lender reported a standalone net profit of ₹5,537 crore for July-September 2026 (Q2 FY27), up 30.31% from ₹4,249 crore a year earlier, according to the investor presentation filed with BSE. Against the June quarter’s ₹5,332 crore, profit was up 3.84%.

The stock liked what it saw. Union Bank shares rose as much as 5.3% to ₹181.05 on the BSE from Friday’s close of ₹172, and were trading 4.65% higher at ₹180 at 1:33 pm, Business Standard reported. The stock ended the day up 5.25% and led the Nifty PSU Bank index, which rose 2.46% and was the only sectoral index in the green while weak private bank results pulled the Nifty 50 down 1.11%, according to Business Standard’s market wrap.

Where the Union Bank of India Q2 profit came from

The engine was core lending income. Net interest income (NII) grew 20.09% year-on-year to ₹10,583 crore, and 5.43% over the previous quarter. Net interest margin rose 19 basis points from a year ago to 2.86%, and to 3.03% if you adjust for a tax refund. If the margin terms are new to you, our explainer on net interest margin walks through the maths.

Operating profit rose 18.99% to ₹8,108 crore. Provisions barely moved at ₹2,570 crore against ₹2,565 crore a year ago, so almost all of the NII growth flowed down to the bottom line.

Other income was the weak spot. Non-interest income fell 6.9% to ₹4,651 crore. Treasury income dropped 34.6% to ₹701 crore from ₹1,073 crore, and recoveries from written-off accounts slipped 18.95% to ₹740 crore. Fee income held up, rising 6.64% to ₹3,210 crore.

Asset quality keeps getting cleaner

This is the part we’d watch most closely. The gross NPA ratio fell to 2.42% from 3.29% a year ago and 2.65% in June. Net NPA eased to 0.42% from 0.55% a year ago. Fresh slippages were ₹1,856 crore in the quarter, lower than both Q1’s ₹2,062 crore and the year-ago ₹1,985 crore, while total recoveries, including written-off accounts, came to ₹2,692 crore. The provision coverage ratio stood at 95.20%.

MD and CEO Asheesh Pandey linked the modest provisions to recoveries running ahead of new bad loans, which he said gives the bank a buffer, according to Business Standard’s results report. The bank’s estimated impact from the shift to expected credit loss (ECL) provisioning is still about ₹5,500 crore.

Loans are growing far faster than deposits

Global advances grew 18.53% to ₹11.56 lakh crore as of September 2026. Global deposits grew just 6.87% to ₹13.19 lakh crore. Loans are growing almost three times as fast as deposits, and that gap has to be funded somehow, so it’s one to keep an eye on. The domestic CASA ratio was 34.93%, up 237 basis points from a year ago (our CASA ratio guide explains why that matters).

On funding, Pandey said the bank raised about $2.25 billion of FCNR(B) deposits through the RBI’s concessional swap window, around 70% of it on a leveraged basis, and that this hadn’t hurt margins. He wants to defend and improve the margin, with 3% as the target.

What it means for investors

The numbers are solid: return on assets was 1.38%, return on equity 17.21%, and the capital adequacy ratio 17.94%. The risk is treasury income. Pandey said the market expects another 50 basis points of rate hikes over the next six months, which could hurt bond gains, though he added that the portfolio has been protected.

On the charts, Harish Jujarey of Prithvi Finmart told Business Standard that the stock is back above its 200-day moving average near ₹175. He sees resistance around ₹188-190 and support at ₹174-175, then ₹165. For the rest of Monday’s earnings line-up, see our Q2 results calendar for October 19.

Disclaimer: This article is for information only and is not investment advice or a recommendation to buy or sell any security. Figures are from Union Bank of India’s Q2 FY27 investor presentation filed with BSE and Business Standard’s reports, linked above. Please consult a SEBI-registered investment adviser before making any investment decision.