State-owned Union Bank of India on Wednesday reported a 27.5% jump in its consolidated net profit to ₹5,641.52 crore for the June quarter of the current fiscal on the back of better margins, improved asset quality and higher interest income.
In the year-ago period, the bank's net profit stood at ₹4,427.94 crore, as per a regulatory filing.
The bank’s net interest income (NII) edged up by 1.05% year-on-year to ₹27,203 crore in the reporting quarter, from ₹26,919 crore, limited by the net interest margin (NIM).
4 July 2026
Get the latest issue of Outlook Business
The NIM marginally advanced by 0.04% year-on-year and 0.16% on a sequential basis to 2.80% in Q1FY27.
Asheesh Pandey, MD and CEO of Union Bank of India, expressed confidence that margins can be improved further despite the evolving interest-rate environment.
Under the special FCNR-B window introduced by the Reserve Bank of India (RBI), Pandey expects around 1.5-2 billion inflows by September. He added that the bank has so far garnered $106 million in deposits.
"We have mobilised around $106 million under FCNR-B deposits so far. Our target is to raise $1.5-2 billion by September," Pandey said during the post-earnings conference.
He added that deposits have been garnered from several locations, including Australia and the UAE.
“Deposits have come from several locations, including Australia and the UAE. We have five dedicated NRI branches and have identified another 20 branches with a large NRI customer base to run a focused mobilisation campaign. We have also set up an NRI cell to contact customers individually instead of relying only on SMS campaigns," he said.
The bank is currently offering interest rates of around 6.10-6.60% and is comfortable with these rates, Pandey said.
“Initially, customers needed time to understand the scheme. Subsequently, the RBI FAQs clarified many queries. FCNR-B mobilisation also requires direct engagement with NRIs, who compare deposit rates before investing.
“The current response has been encouraging, and there is a healthy pipeline,” Pandey said.
The central bank introduced the special FCNR-B window during the June monetary policy committee (MPC) meeting, including bearing the cost of currency hedging, to increase foreign capital inflows and bolster India's external position.
In the quarter under review, global deposits of the bank rose by 3.50% to ₹12.83 lakh crore, compared to ₹12.39 lakh crore in the year-ago period. Domestic deposits increased by 3.49% to 12.83 lakh crore in Q1FY27.
The low-cost, current account and savings account (CASA) deposits increased 11.73% YoY to 4.50 lakh crore.
CASA ratio improved to 35.09% in the reporting quarter, from 32.51% in Q1FY26.
Gross advances of the bank also rose 12.50% YoY to ₹10.96 lakh crore in Q1FY27, from ₹9.74 lakh crore in the corresponding period a year ago. The bank's Retail, Agri and MSME (RAM) advances increased 11.56% YoY to ₹6.08 lakh crore.
In the reporting quarter, the asset quality of the bank improved, with gross non-performing assets (NPAs) falling by 0.87% to 2.65% as on June 30. Shares of Union Bank of India closed 1.08% higher at ₹172.4 apiece on the BSE on Wednesday.
