Union Bank of India Q2 FY27: profit up 31%, NIM 2.86%

Key takeaway from the September-quarter results

Union Bank of India reported a sharp year-on-year rise in profit for the quarter ended September 30, 2026 (Q2 FY27). The state-owned lender said consolidated net profit rose 30.6% YoY to ₹5,781 crore, while standalone profit increased 30.3% YoY to ₹5,537 crore. The improvement was supported by stronger net interest income (NII) and an improvement in net interest margin (NIM). The bank’s disclosures also pointed to better asset quality, with gross and net NPA ratios lower than the year-ago quarter. At the same time, non-interest income declined, led by a fall in treasury income.

Result date and reporting basis

Union Bank of India’s Q2 FY27 results were declared on October 19, 2026, and were presented on a consolidated basis in the shared data. For context, the quarter covered the July-September period, ending on September 30, 2026. Alongside the consolidated numbers, the bank also reported standalone performance where standalone PAT came in at ₹5,537 crore. The year-ago comparison in the provided data shows consolidated net profit of ₹4,425.95 crore and standalone net profit of ₹4,249.08 crore. This sets up the reported 30% plus growth rates for both reporting bases.

Interest income and “interest earned” trends

The data shared includes multiple revenue and interest line items, with “Interest Earned” stated at ₹28,377.73 crore. That figure was up 3.47% QoQ from ₹27,427.10 crore, and up 8.29% YoY. Separately, another line in the data states interest income of ₹28,158 crore for the quarter, up from ₹26,191 crore in the same quarter a year earlier. These numbers collectively indicate that core interest-led income rose meaningfully during the quarter. The reported increase in interest income is important because it feeds into the bank’s ability to grow NII and support profitability. The bank also reported that total business expanded 12.01% YoY to ₹24,75,330 crore as on September 30, 2026.

Net interest income rises, margin expands

Union Bank of India reported NII of ₹10,583 crore in Q2 FY27, up 20.09% YoY from ₹8,812 crore. Sequentially, NII grew 5.43% from ₹10,037 crore. The bank’s NIM improved 19 basis points YoY to 2.86%. Adjusted for a tax refund, NIM was stated at 3.03%, up 20 bps. These margin data points matter because NIM reflects how effectively the bank converts its interest-earning assets into net interest revenue after funding costs. The combination of higher NII and improved NIM was a central driver of the quarter’s profit growth.

Non-interest income falls on weaker treasury performance

The quarter was not uniformly strong across income streams. Non-interest income declined 6.9% YoY to ₹4,651 crore from ₹4,996 crore. The fall was attributed mainly to a sharp decline in treasury income, which dropped 34.6% YoY to ₹701 crore from ₹1,073 crore. This suggests that trading or investment gains were weaker than the year-ago quarter. Even with this headwind, the bank’s overall profitability improved due to stronger core net interest income. The results therefore highlight a shift toward core banking strength offsetting softer market-linked income.

Operating profit, PBT, and bottom line

Operating profit was reported at ₹20,669.81 crore, up 3.28% QoQ from ₹20,012.79 crore, and up 11.48% YoY. Profit before tax (PBT) was stated at ₹7,659.37 crore, rising 4.35% QoQ from ₹7,340.21 crore, and up 36.84% YoY. The same ₹7,659.37 crore figure was also presented as PBDT in the shared data, with identical QoQ and YoY growth rates. Consolidated net profit stood at ₹5,781.00 crore, up 2.47% QoQ from ₹5,641.52 crore, and up 30.62% YoY. Separately, another summary in the shared material stated revenue rose 5.4% YoY to ₹33,471.29 crore (from ₹31,755.44 crore) alongside the ₹5,781 crore consolidated PAT.

Balance sheet growth: deposits, advances, and RAM mix

As of September 30, 2026, total business was reported at ₹24,75,330 crore, up 12.01% YoY. Total deposits rose 6.87% YoY to ₹13,19,000 crore, while domestic deposits were stated at ₹13,19,000 crore after a 6.88% YoY increase. Domestic advances grew 17.35% YoY to ₹11,06,000 crore, and a separate line in the data also referenced gross advances growth of 18.53% YoY. The Retail, Agriculture and MSME (RAM) segment grew 14.65% YoY, with retail advances up 11.24% and MSME advances up 22.39%. RAM advances were stated to be 57.47% of domestic advances, and RAM advances were also given at ₹6,36,000 crore.

Asset quality and capital ratios improve

The bank reported an improvement in asset quality in September 2026 versus September 2025. Gross NPA ratio fell by 87 bps YoY to 2.42% (from 3.29%), while net NPA ratio eased to 0.42% (from 0.55%). Provision coverage ratio was reported at 95.20%, up from 95.13%. On capital, CRAR stood at 17.94% as of September 30, 2026. CET-1 improved to 16.05% from 14.37% a year earlier. The bank also reported return metrics including RoA of 1.38% and RoE of 17.21% in Q2 FY27.

Summary table: key disclosed numbers (Q2 FY27)

Market impact: what investors typically track from this print

The reported quarter showed profit growth being driven primarily by core banking performance, led by higher NII and stronger NIM. That is a key positive signal for investors tracking the sustainability of earnings, particularly in a banking environment where treasury gains can be volatile. The decline in non-interest income, especially treasury income, shows that headline profit momentum did not come from market-linked gains in the quarter. Asset quality metrics improved, with gross and net NPA ratios moving lower, which can reduce future credit-cost pressure if the trend sustains. Balance sheet growth was mixed, with advances growing faster than deposits in the disclosed numbers. For bank investors, the mix of advances, deposit growth, and margin movement typically shapes expectations on future profitability and funding costs.

Analysis: why this quarter matters for Union Bank of India

Q2 FY27 reinforced that Union Bank’s earnings strength, as presented in the shared data, was anchored in core spread income rather than one-off non-interest gains. NII growth of 20.09% YoY alongside a 19 bps YoY improvement in NIM indicates the bank improved profitability per unit of assets, at least versus the year-ago period. The improvement in gross NPA to 2.42% and net NPA to 0.42% also points to healthier asset quality compared with September 2025, which can support steadier earnings if provisions remain contained. Investors will likely weigh the pace of advance growth against deposit growth because funding conditions influence margins over time. The quarter also provides updated capital comfort, with CRAR at 17.94% and CET-1 at 16.05% as of September 30, 2026.

Conclusion

Union Bank of India’s Q2 FY27 results showed strong YoY profit growth on both consolidated and standalone bases, supported by higher NII, improved margins, and better asset quality. The main offset was weaker non-interest income due to lower treasury income. The next data points to watch, based on the disclosures, are whether NIM sustains around 2.86% (or 3.03% adjusted) and how deposits and advances growth evolve after September 30, 2026.