Union Bank (I) Q4 FY26 Concall Decoded: Net NPA Hits a Tiny 0.48% While NIM Gets a December Chill
Union Bank of India just wrapped up its fiscal year, and if the banking sector were a high-stakes poker game, management is currently betting big on “churn.” While the industry has been grappling with global conflicts and the usual regulatory gymnastics, Union Bank managed to stage a dramatic recovery in its credit growth during the final two quarters. They’ve spent the last six months aggressively swapping low-yielding bulk deposits for retail term deposits and CASA, trying to prove that you can, in fact, teach an old public sector bank new tricks.
The bank is moving away from the “growth at any cost” mantra to a “growth if it makes us money” philosophy. With a massive reduction in bulk deposits and a laser focus on high-quality RAM (Retail, Agri, MSME) segments, the management seems to be building a fortress. But like any good fortress, there are a few creaky floorboards—specifically a cooling Net Interest Margin (NIM) that took a hit from the December rate cuts.
Read on, because the way they’re “provisioning for a rainy day” while simultaneously raising dividends is a masterclass in financial signaling.
Section 2 — At a Glance
Net Profit up to ₹18,697 Cr: Management is printing money faster than a central bank on overdrive.
Gross NPA down to 2.82%: The “bad loan” pile is shrinking so fast it might soon need a microscope to find.
Net NPA at 0.48%: At this rate, the bank’s book is cleaner than a operating theater.
CASA Ratio at 35.21%: Up from 32.51% in six months—proving that retail customers still love a good government brand.
Dividend at ₹5 per share: A 50% payout to keep the shareholders from asking too many difficult questions.
NIM at 2.64%: The margin took a December dip, proving that even giant banks feel the cold.
Section 3 — Management’s Key Commentary
“The business of last six months has increased by ₹1,71,000 crores… if you analyse it comes about 25%.” (Translation: We spent the first half of the year napping and the second half sprinting like we left the stove on.)
“We were purposefully shifting from bulk deposit to retail term deposit… we shed off by ~ ₹70,000 crores.” (Translation: We told the expensive, hot-money institutional investors to take a hike so we could save on interest costs. 😏)
“This time apart from this, we have kept ₹700 crores of an additional provision… just you know as a when good time is there, it is always better to keep aside.” (Translation: We have so much profit we’re literally hiding some under the mattress for when the economy inevitably trips over itself.)
“Our more than 99% I think is more than 700 CIBIL score in retail… more than 95% in BBB and above.” (Translation: We aren’t lending to your cousin who forgets to pay his credit card bills anymore.)
“If you see we have raised ₹46,000 crores… the treasury book was reduced by ₹25,000-odd crores which we shifted.” (Translation: We sold some boring government bonds to fund some actual loans because, surprisingly, that’s what banks are supposed to do.)
“We have ₹35,000 crores of IBPC which is zero now… and ₹30,000 crores which we had at below 6% levels, which almost is not there.” (Translation: We purged ₹65,000 crores of ‘charity’ loans that were barely paying for the electricity in our branches. 💅)
