Union Bank of India Shares Surge More Than 5% as Provisions for Bad Loans Decline Sharply in Q2

Mumbai, October 31, 2025: The share price of Union Bank of India (NSE: UNIONBANK) jumped more than 5% in today’s session after the state-run lender reported a sharp drop in provisions for bad loans in its Q2 FY26 results. The stock touched an intraday high of ₹152.00, reflecting strong buying interest driven by the bank’s improving asset quality and prudent credit management.

Q2 Financial Highlights

Provisions for bad loans at Union Bank fell sharply to ₹526 crore in the quarter ended September 2025 from ₹2,504 crore a year ago. Net profit at the bank, however, declined 10% year-on-year to ₹4,249 crore from ₹4,720 crore in Q2 FY25 due to lower treasury income and softer margins.

Net interest income also came in with a modest decline of 2.6% year-on-year, at ₹8,812 crore against ₹9,047 crore in the corresponding quarter of the previous year.

Improvement in Asset Quality

The bank’s asset quality showed a significant improvement, with the gross NPA ratio falling to 3.29% from 4.36% a year earlier. Similarly, the net NPA ratio declined sharply to 0.55% from 0.98%, reflecting the bank’s enhanced recovery efforts and disciplined lending practices.

In absolute terms, gross NPAs came down to ₹32,085 crore from ₹40,499 crore a year ago, while gross slippages reduced to ₹2,151 crore, compared to ₹5,219 crore in the same period of FY25.

Market Performance & Key Metrics

At 1:57 PM IST, shares of Union Bank of India were trading at ₹150.17, up 5.52% from the previous close of ₹142.32. The stock analysis witnessed a notable surge in trading activity, with 405.66 lakh shares changing hands and a total turnover of ₹603.79 crore. The VWAP stood at ₹148.85, indicating sustained buying interest throughout the session.

The bank’s market capitalisation stood at ₹1,14,794.16 crore, with a free-float market cap of ₹29,067.14 crore. The stock’s analysis 52-week range is between ₹100.81 and ₹158.65, and it currently trades at a P/E ratio of 5.89.

Management Commentary and Outlook

The lender remains focused on balancing topline growth with sustained profitability, said Asheesh Pandey, Managing Director and CEO. The bank’s continuous efforts toward strengthening its balance sheet and improving asset quality are paying off, and lower slippages with better risk management will support growth in the future, he said.

The strong performance of the stock analysis in this session reflects the renewed optimism of investors after Union Bank’s asset quality improved, with its bad loan provisions falling substantially, indicating healthier fundamentals into the second half of FY26.

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