Company Update : Union Bank of India Ltd By Motilal Oswal Financial Services Ltd
Loan growth trails systemic growth for FY25; CASA mix stabilizes
Union Bank released its 4QFY25 business update. Following are the key takeaways:
* The bank’s total business grew 7.8% YoY/5.9% QoQ to INR22.9t.
* Gross advances growth was largely in line (+8.6% YoY/3.55% QoQ) at INR9.8t; it was trailing systemic loan growth for FY25. Domestic advances grew 8.3% YoY/3.6% QoQ to INR9.8t. Domestic RAM advances grew 10.6% YoY/3.2% QoQ to INR5.3t.
* Deposits grew 7.2% YoY/7.7% QoQ to INR13.1t, with CASA deposits growing healthy by 3.9% YoY/7.8% QoQ.
* Domestic deposits grew 6% YoY/7.5% QoQ to INR12.7t.
* Union Bank’s loan growth was in line with our expectations. Deposit growth rebounded (up 7.7% QoQ) in 4QFY25 after a 2% QoQ dip in 3QFY25 (surpassing our estimates). The CASA ratio remained stable compared to 3Q, supported by improved CASA deposit growth. Faster deposit growth led to a 278bp QoQ decline in the CD ratio to 72.9%.
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