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Union Bank faces Rs 5,500 crore estimated ECL transition impact

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Union Bank faces Rs 5,500 crore estimated ECL transition impact

The bank expects recoveries to exceed fresh slippages in FY27 and has retained its target of Rs 100-120 billion in total recoveries, including around Rs 30 billion from technical write-offs.

Union Bank’s second-quarter net profit rose 30% year-on-year to Rs 55.4 billion, helped by strong NII growth and lower provisioning, while NIM expanded 6 bps QoQ to 2.86%. The bank’s loan book grew 19.4% YoY to Rs11.3 trillion, significantly outpacing 6.9% deposit growth, pushing the credit-deposit ratio to 85.8%. Fresh slippages fell 11.5% QoQ to Rs19.1 billion, while GNPA and NNPA improved to 2.42% and 0.42%; credit costs declined to 0.21% from 0.38%. The bank has already created about Rs10 billion against the estimated Rs55 billion ECL transition impact, while Motilal Oswal raised its FY27 earnings estimate by 5% and retained a Neutral rating.

Union Bank ’s second-quarter net profit rose 30% year-on-year to Rs 55.4 billion, helped by strong NII growth and lower provisioning, while NIM expanded 6 bps QoQ to 2.86%. The bank’s loan book grew 19.4% YoY to Rs11.3 trillion, significantly outpacing 6.9% deposit growth, pushing the credit-deposit ratio to 85.8%. Fresh slippages fell 11.5% QoQ to Rs19.1 billion, while GNPA and NNPA improved to 2.42% and 0.42%; credit costs declined to 0.21% from 0.38%. The bank has already created about Rs10 billion against the estimated Rs55 billion ECL transition impact , while Motilal Oswal raised its FY27 earnings estimate by 5% and retained a Neutral rating. Advt

_________________________ Union Bank of India has estimated a one-time impact of around Rs 55 billion from the transition to the expected credit loss (ECL) framework, against which it has already created provisions of about Rs 10 billion.


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