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Speaking to CNBC-TV18, Asheesh Pandey, MD and CEO of Union Bank of India, said the bank will consider raising funds through infrastructure or green bonds over the next two quarters, depending on market conditions.
By Meghna Sen January 16, 2026, 11:23:47 AM IST (Published)
Shares of Union Bank of India Ltd. opened 2% higher on Friday, January 16, extending their fifth consecutive session of gains. However, the stock later erased all early gains and was trading about 1% lower near the day's low of ₹176.91.
The stock had surged 8% on January 14, marking its biggest single day rise since March 2023.
Delivery volumes remained strong, with around 2.15 crore shares marked for delivery, higher than the 20-day average of 52.6 lakh shares.
Union Bank of India is the best performing PSU banking stock so far in 2026.
What was a big surprise
- Net interest margins (NIMs) improved 9 basis points quarter-on-quarter.
- Credit costs declined by 13 basis points to a low of 0.09%.
- As a result, return on assets expanded 19 basis points sequentially to 1.35%.
|
Ratios |
2QFY26 |
3QFY26 |
QoQ |
|
NIMs |
2.67% |
2.76% |
9 |
|
Credit Cost |
0.22% |
0.09% |
-13 |
|
ROA |
1.16% |
1.35% |
19 |
- Asset quality also improved, supported by lower fresh slippages and reduced write offs.
|
2QFY26 |
3QFY26 |
QoQ | |
|
GNPA |
3.29% |
3.06% |
-23 |
|
NNPA |
0.55% |
0.51% |
-4 |
- The slippage ratio declined to 0.79% from 0.91% in the previous quarter, down 12 basis points.
Union Bank's deposits fell marginally by 1% quarter-on-quarter, though the CASA ratio improved sharply, rising 140 basis points to 33.96% from 32.56%.
Union Bank open to infra, green bond raise
Speaking to CNBC-TV18, Asheesh Pandey, MD and CEO of Union Bank of India, said the bank will consider raising funds through infrastructure or green bonds over the next two quarters, depending on market conditions.
He added that the bank is aiming to improve net interest margins and defend current NIM levels while maintaining asset quality. "Our NIM has barely declined over the nine month period, and the aspiration is to improve it further," Pandey said.
Pandey also said the bank is focusing on improving average CASA and deposit growth, with the aspiration to further strengthen the CASA ratio going forward.
Investec raised target
Brokerage firm Investec maintained its 'Buy' rating on Union Bank of India and raised its price target to ₹210 from ₹195 earlier.
According to Investec, the NIM expansion was driven by a 17 bps QoQ decline in the cost of deposits. Credit costs eased due to lower slippages and higher recoveries, while management remains confident of further acceleration in growth momentum, with the loan book rising 4.5% QoQ.
The brokerage raised its FY27 and FY28 PAT estimates by 3% and 4%, respectively, largely on account of lower credit costs.
Investec now values the stock at 1.1x December 2027 estimated book value, compared with 1x earlier, citing higher sustainable return on equity. As per Bloomberg data, the stock is currently trading at around 1x price-to-book on FY27 estimates.
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