Union Bank (I) Q2 FY27 Results (NSE: UNIONBANK)
Signal: Steady quarter
The read
The trajectory is improving credit-led earnings quality: gross advances grew 18.53% YoY versus deposits at 6.87%, NII rose 5.43% QoQ to ₹10,583 crore and NIM expanded 6bps QoQ to 2.86%; asset quality also improved with GNPA at 2.42%, down 87bps YoY, and credit cost at 0.21%, down 17bps QoQ, although the 144bps QoQ increase in cost-to-income to 46.78% tempers the operating read-through.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹32,809 Cr | N/A | N/A |
| EBIT | ₹8,108 Cr | N/A | |
| Net profit | ₹5,537 Cr | N/A | |
| EBIT margin | 24.71% |
P&L walk
Q2FY27 operating momentum was led by NII of ₹10,583 crore, up 5.43% QoQ, while operating profit increased 1.31% QoQ to ₹8,108 crore and PAT rose 3.84% QoQ to ₹5,537 crore; the filing does not provide a comparable standalone Q2 prior-year column.
Key positives
- Gross advances reached ₹11,55,876 crore, up 18.53% YoY, materially ahead of global deposits at ₹13,19,455 crore, up 6.87% YoY.
- NII increased to ₹10,583 crore, up 5.43% QoQ and 15.03% in H1FY27, while NIM expanded to 2.86%, up 6bps QoQ.
- Asset quality improved with GNPA falling 87bps YoY to 2.42%, NNPA falling 13bps to 0.42% and PCR rising 7bps in H1FY27 to 95.20%.
- MSME advances grew 22.39% YoY to ₹1,80,394 crore, ahead of retail advances growth of 11.24%, supporting RAM advances growth of 14.65%.
Key concerns
- Cost-to-income ratio increased 144bps QoQ to 46.78% as operating expenses rose 7.36% QoQ to ₹7,126 crore, partially offsetting NII momentum.
- Deposits grew 6.87% YoY versus advances growth of 18.53%, with the global CD ratio rising 846bps YoY to 88.13%; sustained credit growth will require stronger deposit mobilisation.
- Yield on advances declined 52bps in H1FY27 to 7.90%, despite NIM improving 12bps over the same period, making funding-cost and mix trends important to monitor.
Research and educational content only. Not investment advice.