Union Bank of India (UNIONBANK) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to Union Bank of India earnings conference call for the period ended September 30th, 2026. The bank is represented by the Managing Director and CEO, Shri A. Nishpandey, Executive Directors, Shri Nitesh Ranjan, Shri Ramasubramaniam S, Shri Ambrish Prasad, and other members of the top management. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. V. B. Sahay, Deputy General Manager. Thank you, and over to you, Mr. Sahay.
V. B. Sahay (Union Bank of India): Thank you, sir. Good afternoon, ladies and gentlemen. I, V. B. Sahay, Head of Investor Relations, welcome you all to the Union Bank of India earning con-call for the period ended September 30th, 2026. The structure of the con-call shall include a brief opening statement by our respected MD and CEO sir, and then the floor will be opened for interaction. Before getting into the con-call, I will read out the usual disclaimer statement. I would like to submit that certain statements that may be discussed during the investor interaction may be forward-looking statements based on current expectations. These statements involve number of risks, uncertainties, and other factors that cause the actual results to differ from the statement. Investors are, therefore, requested to check this information independently before making any investment or other decisions. With this, I now request our MD and CEO sir for his opening remarks. Thank you and over to you, sir.
A. Nishpandey (Union Bank of India): Am I audible, to the coordinator?
Moderator: Yes, you are. Please go ahead.
A. Nishpandey (Union Bank of India): Thank you, thank you. So, thanks to Mr. Sahay and to coordinator. And good afternoon, everyone, and it gives me great pleasure to welcome all of you to Union Bank of India, your bank, financial results announcement for the quarter ended 30th September 2026. With this, I have also concluded my first year in the bank, and happy to interact with you for last four, five quarters. So, before I, take you through our performance, first of all, [clears throat] my all best wishes on the today Durga Ashtami, Navami, and all festivities which are lined up in the month of October and November. With this, let me briefly set the context and share a few remarks. So let me begin by saying that in Q2 '26, '27, our country, our Bharat, our economy and the banking sector have continued to demonstrate remarkable resilience despite persistent global headwinds. This is supported by strong domestic fundamentals, prudent macroeconomic management, and timely policy interventions. We need to acknowledge that the half year, '26, '27 was deeply affected by West Asia conflict, apart from El Niño effects and AI-led disruptions, with varied channels of impact on our macros and market via oil prices, overall inflation, trade linkages, logistics, capital flows and market moments. I would like to acknowledge the consistent support extended by the government of India, as well as our regulator, Reserve Bank of India, both mitigating the impact of external disruptions. Measures [clears throat] aimed at safeguarding and supporting businesses, particularly MSMEs, have helped preserve confidence across the country and the financial system. The RBI's policy major to attract dollar flows, [clears throat] including FCNR and ECB scheme, bolstered liquidity within the banking system. As a result, the banking sectors continued to demonstrate strength, with credit, system credit and deposit growth standing at around 19.4 and 17.8 YoY, respectively. Against this backdrop, your bank, the Union Bank, has also shown a sustained pickup in business growth. We continued to execute the strategic priorities that we have consistently highlighted in our previous various interactions, with a sharp focus on aligning our advances growth, [clears throat] with overall banking system, with while staying cognizant of long-term business sustainability, profitability,
A. Nishpandey (Union Bank of India): Friends, as we have interacted earlier, we have very clear five defined strategic pillars, efficiency, robustness, quality, sustainable growth, profitability, and customer centricity with ease of doing business for both customers and employees. Let me dwell in between on these five pillars. With the efficiency we clearly mean the proper capital deployment, technology deployment, the human resource development, building efficiencies in banking operations. So, creating efficiencies in whatever we do, how we can create the efficiencies. When we talk about robustness, it is a good compliance culture in a bank, not an instance-based and strong cybersecurity posture, resilient monitoring systems, quality credit book, and so forth, so on. So, third is the quality and sustainable growth. So, we pursue and we have been talking on this topic that how when growth will couple with Union Bank business, how the quality will be maintained. I think these results give some color on that as well. The next point is profitability. Yes when we talk about profitability so interacting with various press people, investors, analysts, we come to know that you know well there are various points which we can which we can showcase. So, one was the core ROA. So, this time our presentation clearly shows what is the core the return on assets that is excluding the TWO and the treasury income. And similarly ROA/RWA, which is one of the good parameter to discuss upon, is also showcase. So, if you see the last pillar is customer centricity with ease of doing business for customers and employees both. So, when we are compiling or when we're combining all these five pillars, we are working upon the same and today's result is in line with those pillars. So, while maintaining as far as the various things which are the best as far as the Union Bank is concerned, like profit, like ROA, like the stress SMA level, which is the lowest in the bank up till now in the history of amalgamation. Similarly, your ROE and then NIM, which has rebounded well from 2.64 level to 2.86. So, I think we have given a very clear picture that how things There are certain initiatives which were taken last quarter, which we have also showcased. Probably, I I I'm very sure that the presentation and this presentation, you all are having with you. So, at Union Bank of India, our commitment remains anchored in our guiding principle, business first and compliance always. We aspire to remain a trusted partner for our customers, investors, regulators, and all stakeholders, while contributing meaningfully to the Indian banking ecosystem. Equally important, our work force of over 74,000 employees continues to embody our enduring philosophy, Achhe Log Achha Bank, good people to bank with. In fact, some of the transformational initiatives we undertook this year, such as Union Sudharshan were all developed in house. So, I think this is very, very important. It is the state of the art, unique in the industry and at a minimal cost. And I think the shortest period of time, within 6 to 7 months, this entire infrastructure and and the unit is build. I will detail it detail it in shortly. I'm also pleased to share that during that Sorry. During the quarter, the bank received several prestigious recognitions. One is in Rajbhasha Kirti Puraskar, our Union Bank has got the prize from the honorable Home Minister hands in the event held in mid-September in Navi Mumbai. And another is the secured third rank in the overall EASE 9.0 Q1 FY '26-'27 performance ranking amongst all 12th Public Sector Banks, reflecting our continued focus on customer centricity, operational excellence, and digital perfo- transformation. Let me in a brief cover up on the financial performance. So, profitability net profit for Q2, 5,537 crores,
A. Nishpandey (Union Bank of India): clauses or maybe various questions that whether NIM will sustain. So we improved further from the last quarter of 2.80 to 2.86 and remain above the full year FY 25-26 level of 2.70. With the initiation of rate hike cycle, certainly we believe it will be constructive to the banking industry and to us also which we can deliberate further. Additionally the FCNRB, let me acknowledge, compliment the the Reserve Bank of India who came with this perspective and it is not only the liquidity or maybe the dollar inflows to the Indian economy, but I think the major benefit is the ALM, because our almost 70% is the five-year term. So it is giving a very good, sustained resource for next three to five years. So coming to our profitability, return on assets is 1.38, which we have inched further up. Return on equity at 17.21, capital position we stand at 17.94, CET1 is 16.05. I think now almost most of the part of CRAR is based upon CET1. And these levels provide significant growth headroom while maintaining strong resilience against any external shocks. Asset quality, gross NPA declined by 87 bps YoY to 2.42, net NPA improved to 0.42, down by 13 basis point YoY, PCR remain strong at 95.20. Credit cost contained at 21 basis point, reflecting discipline in underwriting standards, effective recovery efforts, despite persistent geopolitical volatility. The improvement was supported by sustained moderation in slippages. The slippage ratio improved to 0.72 compared with 0.91 in the corresponding period last year. Yes, the gross slippage during the quarter stood at 1,909 crores, which were more than offset by reduction of 3,086 crores by the recoveries and upgradations. Coming to the deposits and liability franchise, our deposit grew by 6.88 YoY basis and the CASA ratio is stable at 35, improving significantly from 32.56 a year ago, demonstrating the success of our ecosystem banking initiative, which we have talked many a times during our interaction. On year-on-year basis, our combined RTD and CASA, this is what we say is our first priority, is merely grown by 1.11 lakh crore, registering growth of 11.41%. Also, if you take the color of our deposit, you know, the share of various components, so CASA and retail term deposit increased to 80.3 from 77.7 in the September '25. So let us talk about average to terminal deposit ratio, which remains at 99%, and which is very very good, and correspondingly, if we take CASA to terminal average to deposit is around 95-96%. So let me say that the bank which we told efficiency, to build efficiency, we are working on average figures. So let me again reiterate that yes, your bank, Union Bank, is working upon the average figures rather than much of the terminal figures. So our global advances continue to witness healthy momentum at 18.53 YoY, domestic advances grew by 17.36, and coming to the RAM, it is global level 55.45, where domestic it is 57.43. And if we if we if we take the impact of shedding of 33,000 crore of IBPC, which shed off, and also some of the low yielding assets, I think the actual growth is more than 20-21% in that range. So retail advances grew by 11.24, MSME by 22.39, and this is the way in which we are going for a sustainable growth in various quarters to quarters. So as a green shoot in private sector CapEx, we are seeing the next phase of credit growth in economic activity, whether it is data centers or AI infrastructure, nuclear, renewable power, and select conventional sectors like steel, manufacturing, I think these are picking up including pharmaceuticals. So this is giving a good sort of a comfort to we bankers that going ahead as well, there is a good phase of credit growth in economic activity. So coming to the vision ahead for Union Bank of India, the the journey ahead is not only about growth, it is equally about transforming the way we operate and serve our customers. As we move and navigate
A. Nishpandey (Union Bank of India): uncertainties, our focus remains firmly on long-term sustainable growth and strategic transformation. We are pursuing this transformed through a balanced combination of intelligence, automation and human oversight. Various initiatives were detailed in a comprehensive, so actually, to all my friends who have joined, my request is in our website and various Gem portal and all you will find an RFP, a Project Muskaan known as Project Muskaan, which encompasses I think nine pillars. I think very, very different from last 15-20 years, which you would have seen any bank coming with various RFPs. So, this RFP is covering nine pillars and what sort of five pillars we are talking, the same sort of pillars are being talked in this RFP as well. It is unique in itself and certainly it will create a lot much impact. But let me tell you, friends, we are already working on this, which we have showcased in our analyst presentation. And two of the pillars, which we thought initially, are already completed, in which Union Sudharshan is one. And other pillars, which even shown 90% sorry, nine pillars, there is a the work already done. So, it is not that we are waiting for any any any consultant or any to come and start the program. So, from moving from 1 pillar to 9th, in many of them we are somewhere from 20% to 40% of the work is already done. So, actually, we are very poised to complete that project, which is I think I would request all of you to please see section three of page 30 to 35 in that RFP. So, the objective is straightforward, to move from reactive management to proactive and intelligence-led banking and managing the things. Another important pillar of our transformation journey is robotic process automation and where high-volume, repetitive and rule-based activities to be executed automatically with greater speed, consistency and accuracy. So, we are now close to 100. We are now we started this and now we are almost close to 100. But by March '27, we expect to cross maybe near around 200. And by next March, not this, but '28, we want to cross somewhere between 400 to 500 processes. I think that will give lot of ease of doing business, lot of accuracy, consistency and customer service. I think that is the whole purpose of this. We also have a cross-functional team in the concept of garage, which is prioritizing various operational technology related issue faced by field functionaries, and we are improving day-to-day processes. We also have established central reconciliation, actually it is also part of an RFP, but let me brief you that it is headed by a unit is headed by CGM at Hyderabad. Almost more than 200, 300 people working over there, our in-house and also some of the outsourced. But the entire reconciliation, because once we become robust, it will yield to business. That is what correlation we have seen in our bank that if we improve in the compliance and assurance function, it has a direct impact on the business growth. So, I think that is where we are moving to that direction. I would therefore say that Union Bank of India is steadily building the necessary capabilities, strengthening our data architecture, enhancing workforce skills, and creating the right balance between technology adoption and human oversight. In conclusion, I would like to express my sincere gratitude to our customers, share holders, investors, board members. My board has really helped us, regulators and all other stakeholders for their continued trust and support. And I would also like to [cough] express my gratitude to all of our investors. Whenever we had interaction, you have always always given us suggestions to our to include that in our to-do list, where we from quarter to quarter, month to month, we have tried to improve upon those. So, I think my gratitude to all of you for being with us and giving us a lot of suggestions for improvement. As our India, our Bharat enters into next phase of economic growth, the banking sector is well positioned to support this transformation, and your bank, Union Bank of India, is determined to play a much meaningful role in this journey. We will continue to combine resilience with innovation, scale with efficiency and technology with human judgment. So, thank you, and over to you Sahay ji and thank and over to coordinator and all the investors for the interaction please.
V. B. Sahay (Union Bank of India): Thank you, sir.
Moderator: Shall we open the line for questions?
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