Union Bank of India Q2 FY2025

Union Bank of India Reports Impressive 34% YoY Profit Growth in Q2 FY2025

Union Bank of India (UBI) has delivered impressive financial results for Q2 FY2025, showcasing a remarkable 34% year-on-year increase in consolidated net profit. The bank’s net profit soared to ₹4,720 crore, compared to ₹3,511 crore in the same quarter last year. This surge reflects a robust performance, primarily supported by a significant reduction in provisions and contingencies.

Key Financial Highlights

The profit growth was not only notable year-on-year but also marked a solid 28% sequential rise from the previous quarter. However, the bank did experience a slight decline in net interest income (NII), which decreased by 0.9% to ₹9,047 crore, down from ₹9,126 crore a year ago. This decline was largely attributed to a slight increase in interest expenses during the quarter. Despite this dip, total income remained stable, buoyed by a healthy contribution from non-interest income sources and recovery from written-off accounts.

Improving Asset Quality

One of the standout features of UBI’s performance in Q2 FY2025 was the continued improvement in asset quality. The bank’s gross non-performing assets (NPA) ratio decreased to 4.36% as of September 2024, down from 4.54% in the previous quarter, and showing a sharper decline from 6.38% in Q2 FY2024. This trend indicates effective management of asset quality and proactive measures taken to address potential defaults.

Similarly, the net NPA ratio stood at 0.98%, reflecting a slight increase from 0.90% in the previous quarter but a significant improvement from 1.30% in the same quarter last year. This indicates the bank’s ongoing efforts to manage and mitigate risks associated with non-performing loans.

Strong Provisions and Capital Adequacy

Union Bank of India also maintained a robust provision coverage ratio (PCR) of 92.79%, ensuring it is well-prepared for any potential defaults. This high coverage reflects the bank’s commitment to safeguarding its financial health and maintaining investor confidence.

Furthermore, the bank’s capital adequacy ratio under Basel III guidelines was reported at 17.13%, comfortably exceeding regulatory requirements. This strong capital position not only provides a buffer against potential risks but also positions UBI for future growth opportunities.

Conclusion

In summary, Union Bank of India’s impressive 34% net profit growth for Q2 FY2025 highlights its effective management strategies and commitment to improving asset quality. With a strong capital position and high provision coverage ratio, the bank is well-equipped to navigate potential challenges ahead. Union Bank of India Q2 FY2025, Investors and stakeholders can look forward to a positive outlook as UBI continues to strengthen its financial foundation.