The shares of a prominent public sector company have fallen up to 7 percent after the company missed its loan growth and deposit guidance for the financial year 2025.
Price Movement
With a market capitalization of Rs 93,015.48 crore, the shares of Union Bank of India were trading at Rs 121.85 per share, decreasing by around 7 percent as compared to the previous closing price of Rs 131.35 apiece.
Reason for Fall
Union Bank of India shares turned bearish after missing its FY25 loan and deposit growth targets. The bank reported loan growth of 8.6 percent, below its 13 percent guidance, while deposit growth stood at 7.2 percent, missing the projected 9–11 percent range. The shortfall has raised concerns about the bank’s performance and outlook.
Financial Performance
Net profit rose 28.2 percent YoY to Rs 4,604 crore, with Rs 13,002 crore earned in the nine months ending December 2024, reflecting 25.8 percent growth. ROA improved to 1.3 percent and ROE to 17.75 percent. The capital adequacy ratio stood at 16.72 percent, with CET1 at 13.59 percent.
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Strategic Focus
The bank is focused on sustainable growth with a balanced approach to top-line and bottom-line performance. It has reduced high-cost bulk deposits to enhance CASA and protect NIM. The overall strategy emphasizes profitability and operational efficiency rather than aggressive expansion, aligning with long-term value creation goals.
New Initiatives and Developments
The company launched key initiatives, including five Nari Shakti Branches to support women entrepreneurs and new offerings like Union Current Account STP and Union Green Home on its 106th Foundation Day. It expanded to 8,574 branches, added 146 this year, and opened 32 lakh CASA accounts in FY25’s first nine months.
Outlook and Future Guidance
The bank is confident of meeting its Rs 16,000 crore annual recovery target, with Rs 10,800 crore already recovered. A robust Rs 75,000 crore loan pipeline exists, including Rs 36,000 crore awaiting disbursement. Management remains committed to sustainable growth and long-term value creation for stakeholders while maintaining strong operational momentum.
Company profile
Union Bank of India Ltd. segments include Treasury Operations, Corporate and Wholesale Banking, Retail Banking Operations, and Other Banking Operations. The Treasury Operations segment provides a range of account options, including savings and current accounts, term and recurring deposits, and demat and online trading accounts.
Written by Abhishek Singh
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