Company Update : Union Bank of India by Motilal Oswal Financial Services Ltd
Growth in advances and deposits remains sluggish
Union Bank released its 2QFY26 business update. The following are the key takeaways:
* Gross advances for the bank stood flat QoQ (up 4.98% YoY) at INR9.75t, trailing systemic loan growth as well as peers for 2QFY26. Domestic advances growth too remained weak at 0.43% QoQ (up 5.34% YoY). Net advances growth is expected at 8.4% YoY/2.8% QoQ as per MOFSL.
* Within advances, growth for domestic retail advances was healthy at 4.1% QoQ/23.96% YoY. Domestic RAM advances grew 1.7% QoQ/9.3% YoY.
* Deposits also dipped 0.43% QoQ (up 1.9% YoY) to INR12.34t. Domestic CASA declined 0.3% QoQ (up 1.4% YoY); as a result, the domestic CASA ratio remained stable at 32.5%. Deposit growth is expected at 3.2% YoY/3.3% QoQ as per MOFSL.
* Union Bank reported weak business growth in 2QFY26, with advances growth flat and deposits declining, thus lagging behind system-wide growth. The CD ratio (based on gross advances) increased to ~79% in 2QFY26 from 78.6% in 1QFY26.
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