Union Bank of India · Material risks, their source context, and severity in the latest available quarter.
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Risk intelligence
Bank has lagged system loan growth for over 12 quarters, with current growth of 4.99% vs industry ~11%. While management targets catch-up by Q4 FY26, execution risk remains given competitive pressures in retail and MSME segments.
Yield on advances declined 16 bps QoQ while cost of deposit reduction was only 5 bps, creating margin squeeze. Management acknowledged strategy numbers appear different from actual results, with full benefit of deposit repricing yet to materialize.
Credit cost rose to 222 bps in Q2 FY26 from 109 bps YoY, more than doubling. While asset quality improved YoY, the sequential increase warrants monitoring as growth accelerates.
Treasury profit declined sharply to INR 192 crore from INR 961 crore in Q1 due to one-time gains. Management expects better quarters ahead but acknowledged dependence on market conditions and rate movements.
