In 2025, Union Bank of India has demonstrated notable financial growth and resilience, positioning itself as a significant player in the Indian banking sector. The bank's performance throughout the year reflects strategic initiatives, robust financial metrics, and a positive trajectory in stock valuation.
For the quarter ending December 31, 2024 (Q3 FY25), Union Bank reported a net profit of ₹4,623.03 crore, marking a 27.5% increase from ₹3,625.39 crore in the same period the previous year. This surge is attributed to enhanced core income and a reduction in non-performing assets (NPAs). Total income for the quarter rose to ₹31,749.18 crore, up from ₹29,801.98 crore year-on-year, driven by a 6.3% increase in interest earned, totaling ₹27,134.77 crore.
Net Interest Income (NII) experienced a modest growth of 0.8% year-on-year, reaching ₹9,240 crore. However, the Net Interest Margin (NIM) slightly declined to 2.91% from 3.08% in Q3 FY24. Non-interest income, encompassing fees, commissions, and treasury revenues, grew by 17% to ₹4,417 crore, underscoring the bank's diversified revenue streams.
Union Bank has made significant strides in improving asset quality. Gross NPAs reduced to 3.85% from 4.83% a year earlier, while Net NPAs decreased to 0.82% from 1.08%. The Provision Coverage Ratio (PCR) improved to 93.42%, indicating a strengthened capacity to manage potential loan defaults. Provisions for NPAs stood at ₹1,477 crore, up from ₹1,226 crore in Q3 FY24, reflecting a proactive approach to risk management.
The bank's Capital Adequacy Ratio (CAR) improved to 16.72%, with the Common Equity Tier-1 (CET-1) ratio at 13.59%, signifying a robust capital foundation. Return on Assets (RoA) increased by 23 basis points to 1.30%, and Return on Equity (RoE) rose by 50 basis points to 17.75%, highlighting enhanced profitability and efficient capital utilization.
As of February 27, 2025, Union Bank stock price stood at ₹115.75, reflecting a 1.28% decrease from the previous close. The stock has experienced a 3.39% decline year-to-date but has shown a 5.98% increase over the past five days. The bank's market capitalization is ₹88,358.99 crore, with a trailing twelve months (TTM) Price-to-Earnings (P/E) ratio of 5.60, compared to the sector P/E of 9.01.
Analyst sentiment remains optimistic, with eight analysts assigning a strong buy rating and one recommending a sell. The bank's 52-week high is ₹172.45, and the 52-week low is ₹100.75, indicating potential upside as market conditions evolve.
Union Bank has focused on expanding its Retail, Agriculture, and MSME (RAM) segments, which collectively grew by 9.26% year-on-year. Retail advances increased by 16.36%, agriculture by 4.34%, and MSME by 6.34%, with RAM advances constituting 56.69% of domestic advances.
The bank continues to invest in digital transformation to enhance customer experience and operational efficiency. Initiatives include the development of online services and improved digital payment systems, positioning Union Bank to meet evolving customer needs and technological advancements.
In summary, Union Bank of India's performance in 2025 reflects strong financial metrics, improved asset quality, and strategic growth initiatives. The bank's focus on diversification, digital innovation, and robust risk management positions it favorably for sustained growth in the dynamic banking landscape.