Union Bank of vs Central Bank of Q4 FY26

UN

Union Bank of

Q4 FY26 · Financial Services

Union Bank of India reported a strong Q4 FY26 with net profit of ₹18,697 crore and recommended a dividend of ₹5 per share. The bank achieved robust business growth, with gross advances up 9.74% YoY and a significant improvement in CASA ratio to 35.21% from 32.51% in September. Management highlighted a strategic shift from bulk deposits to retail term deposits and CASA, reducing bulk deposits by ₹70,000 crore. The bank also created a ₹700 crore contingency provision without impacting profit or capital. NIM compressed to 2.64% due to the December rate cut but management expects stabilization and gradual improvement. Credit cost was low at 23 bps for the year, with guidance of ~1% for FY27. Key risks include potential stress from West Asia disruptions and elevated SMA1 levels, though management sees no material impact yet. The bank targets 13-14% credit growth in FY27 while maintaining asset quality and profitability.

Guidance read

Credit growth target of 13-14% for FY27: Management expects to achieve 13-14% credit growth in FY27, in line with industry trends and better than the 9.74% YoY growth in FY26. NIM to stabilize and improve from 2.64%: Management expects NIM to defend current levels and gradually improve, driven by CASA expansion and better asset-liability management. Credit cost guidance of ~1% for FY27: Management guided credit cost around 1% for FY27, up from 23 bps in FY26, reflecting normalization and prudent provisioning. PSLC fee income to potentially reach ₹1,000 crore: Management indicated that PSLC fee income could return to ₹1,000 crore plus levels in FY27, similar to FY25, after a lower contribution in FY26.

Risk read

Key risks include West Asia geopolitical disruption impact — Ongoing West Asia conflict could stress energy-sensitive sectors and remittance flows, though management sees no material impact yet.; Elevated SMA1 levels — SMA1 loans nearly doubled sequentially, indicating potential stress in the near term, though management attributed it to migration from SMA2.; NIM compression from rate cuts — Further repo rate cuts could compress NIM, though management expects to defend margins through liability mix improvement.; Deposit growth lagging credit growth — Total deposit growth of 2.72% YoY trailed credit growth of 9.74%, potentially constraining future loan growth if not addressed..

Promise ledger

Scorecard data is being built as historical quarters are processed.

CE

Central Bank of

Q4 FY26 · Financial Services

Central Bank of India reported a mixed Q4 FY26. Total business grew 15.6% to ₹8.12 lakh crore, with advances up 18.76% and CASA at 47.3%. Net profit fell to ₹724 crore (down 46% YoY) due to a one-time DTA impact of ₹632 crore from tax regime transition. Excluding this, adjusted PAT was ~₹925 crore. NIM improved 30bps QoQ to 3.07%, aided by an income tax refund. Asset quality improved: GNPA down 51bps YoY to 2.67%, slippage ratio improved to 1.16%. Management guided for 14-16% credit growth and NIM above 3% in FY27. Key risk: elevated slippages in Q4 due to audit-driven technical downgrades in MSME/agriculture.

Guidance read

Credit growth of 14-16% in FY27: Management expects advances to grow 14-16% in FY27, supported by strong capital adequacy (CRAR 17.91%) and outreach programs. Deposit growth of 10-12% in FY27: Deposits are guided to grow 10-12% in FY27, with continued focus on CASA mobilization. NIM to remain above 3% in FY27: Net interest margin is expected to stay above 3% in FY27, supported by strong CASA base and RAM focus. Slippage ratio to be less than 1% in FY27: Management targets slippage ratio below 1% in FY27, down from 1.16% in FY26.

Risk read

Key risks include Elevated Q4 slippages due to audit-driven downgrades — Q4 slippages rose to ₹1,310 crore vs ~₹800 crore average, attributed to technical downgrades in MSME and agriculture during audits.; ECL implementation impact on profitability — Transition to ECL norms from April 2027 may require additional provisions of ₹600-650 crore annually, though management expects to offset via tax savings.; NIM pressure from external benchmark-linked advances — 61% of advances are linked to external benchmarks, causing yield compression; deposit repricing lag may pressure margins.; Lumpy airline account recovery uncertainty — Recovery from a large airline NPA is ongoing; only ₹515 crore guarantee received so far, with auction process underway..

Promise ledger

Scorecard data is being built as historical quarters are processed.