Union Bank (I) H1FY27 Results (NSE: UNIONBANK)
Signal: Earnings grew
The read
H1FY27 marks a stronger earnings-quality phase: total income grew only 3.8% YoY to 66,13,153 lakh, but operating profit grew 17.4% to 16,19,121 lakh and PAT grew 29.0% to 11,42,252 lakh as provisions fell 45.2% and GNPA/NNPA improved to 2.42%/0.42%; the key watchpoint is operating cash flow of -60,52,954 lakh as advances expanded by 80,70,883 lakh.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹66,131.53 Cr | +3.8% | N/A |
| EBIT | ₹16,191.21 Cr | +17.4% | |
| Net profit | ₹11,422.52 Cr | +29.0% | |
| EPS | ₹14.96 | +29.0% | |
| EBIT margin | 0% |
P&L walk
Consolidated operating profit rose 17.4% YoY to 16,19,121 lakh as total income grew 3.8%, while provisions fell 45.2% to 1,67,558 lakh and associate profit of 48,395 lakh lifted PAT growth to 29.0%.
Segments
Corporate/Wholesale Banking was the main incremental driver: revenue rose to 12,45,129 lakh from 11,18,951 lakh and segment result increased 90.0% to 2,84,934 lakh, while Treasury revenue fell 9.7% and result fell 22.6%; consolidated PAT also exceeded standalone PAT by 48,395 lakh from associate profit.
Key positives
- Consolidated PAT rose 29.0% YoY to 11,42,252 lakh while operating profit increased 17.4% to 16,19,121 lakh, producing a 285bps expansion in operating margin to 24.48%.
- Provisioning declined 45.2% YoY to 1,67,558 lakh and asset quality improved, with GNPA falling to 2.42% from 3.29% and NNPA to 0.42% from 0.55%.
- Corporate/Wholesale Banking segment result rose 90.0% YoY to 2,84,934 lakh on revenue growth of 11.3% to 12,45,129 lakh.
- EPS grew 29.0% to ₹14.96, in line with PAT growth, with paid-up equity share capital unchanged at 7,63,361 lakh.
Key concerns
- Operating cash flow was -60,52,954 lakh in H1FY27 versus -13,17,684 lakh a year earlier, driven mainly by an 80,70,883 lakh increase in advances against a 12,55,099 lakh increase in deposits.
- Total income growth remained modest at 3.8% YoY, while Treasury revenue declined 9.7% and Treasury segment result declined 22.6% to 2,39,780 lakh.
- Other income declined 0.9% YoY to 10,32,670 lakh, limiting the top-line growth rate despite interest earned increasing 4.7%.
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