Union Bank shares rise 4% after 50% YoY surge in Q4 PAT

Union Bank of India shares rose by 3.9% to their day’s high of Rs 127.75 on the BSE on Monday after the state-run lender reported a 50% year-on-year jump in net profit to Rs 4,985 crore for the March quarter. However, the bank also flagged potential pressure on net interest margins (NIMs) due to possible rate cuts by the Reserve Bank of India.

The bank had reported a net profit of Rs 3,311 crore in the same quarter last year. Total income rose to Rs 33,254 crore from Rs 31,058 crore a year earlier.

While net interest income (NII) remained flat at Rs 9,514 crore, an 18% rise in non-interest income to Rs 5,559 crore and a 16% decline in provisions to Rs 2,715 crore helped boost profitability. The bank’s NIM stood at 2.91% in Q4—within its guided range—but Managing Director and CEO A. Manimekhalai acknowledged that further rate cuts could compress margins.

“More than 29% of our book is linked to the repo rate and gets automatically repriced with any rate cut,” Manimekhalai said during the post-results briefing.

Loan growth for FY25 came in at 8.62%, falling short of the bank’s target range of 11–13%. She declined to provide fresh guidance on credit growth or NIMs for the new fiscal year, citing uncertainty in the economic outlook.

Manimekhalai did not comment on the controversy regarding the alleged bulk purchase of a book by former Chief Economic Advisor Krishnamurthy Subramanian. Reports suggest the bank spent Rs 7.2 crore on the purchase, and that a general manager has been suspended. She also did not respond to queries about whether senior management is under investigation.

Operating expenses rose 20% sequentially to Rs 7,373 crore, pushing the cost-to-income ratio to 48.91% from 45.14%, primarily due to HR-related expenditures.

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Looking ahead, Manimekhalai said the bank would focus on “profitability and prudent, sustainable growth.”

Amid recent security concerns in border states, the bank has advised staff to follow all guidelines issued by state-level banking committees strictly. It also ensures adequate cash availability at branches and ATMs while strengthening cybersecurity.

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Union Bank of India share price target


According to Trendlyne data, the average target price for Union Bank shares is Rs 143, implying a potential 16% upside. Out of 12 analysts covering the stock, the consensus rating is a ‘Buy’.

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