Union Bank of vs Go Digit General 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.

Go Digit reported a strong Q4 FY26 with gross direct premium of 11,300 crore, up 16.2% YoY, and PAT of 1,759 crore (up 49% YoY). The combined ratio improved to 105.7% (down 1.2pp YoY). Growth was driven by two-wheeler (up 52% to 556 crore) and fire segments, while health reinsurance was dropped due to poor profitability. The company transitioned to Indian Accounting Standards (IFRS-aligned) and reported an ROE of 17.7%. Management guided for continued focus on underwriting discipline, new specialty lines, and expects regulatory action on expense management to benefit the industry. Key risk: sustained competitive pressure in motor and health segments could pressure margins.

Guidance read

New specialty lines target 1,000 Cr premium in 3-5 years: Management plans to develop niche commercial lines, aiming for ~1,000 crore premium over 3-5 years. Motor OD loss ratio to stabilize by Q2 FY27: Corrective actions taken in Q4 should stabilize motor OD loss ratio by July-September 2026, then reduce. Crop insurance direct participation in FY27: Company plans to participate directly in crop insurance tenders in FY27, building on capability development.

Risk read

Key risks include Motor TP price hike delay — No TP price hike for fifth consecutive year; industry loss ratios may remain under pressure.; EUM regulatory compliance — Company's EUM is above peers due to business mix; regulatory action on expense management may impact growth.; Fire segment net loss ratio deterioration — Net loss ratio in fire increased due to two large claims; gross ratio stable but net impacted by reinsurance costs..

Promise ledger

Scorecard data is being built as historical quarters are processed.