ICRA has reaffirmed Union Bank of India’s credit ratings as of October 6, 2025. The ratings reflect Union Bank’s strong position as the fifth-largest public sector bank, its healthy earnings profile, and strong liquidity. The outlook on the rating is stable, reflecting expectations that the bank will maintain a steady credit profile with stable asset quality. Certain ratings have been withdrawn following the redemption of related instruments.
Ratings Reaffirmed
On October 6, 2025, ICRA reaffirmed the credit ratings for several of Union Bank of India’s instruments. These ratings highlight the bank’s robust financial standing and market position. ICRA’s decision acknowledges Union Bank’s position as the fifth-largest public sector bank in India.
Key Factors Supporting the Ratings
The ratings are supported by the bank’s healthy earnings, driven by reduced credit costs and high provision coverage on legacy non-performing assets (NPAs). A well-developed deposit franchise, resulting in a high share of retail deposits, and a strong liquidity profile also contribute to the ratings. ICRA acknowledges Union Bank’s comfortable capital cushions, driven by internal accruals and capital raised via a qualified institutional placement (QIP) of Rs. 8,000 crore in FY2024.
Outlook
The stable outlook reflects ICRA’s expectation that Union Bank will maintain a steady credit profile. This includes maintaining stable asset quality, healthy profitability, and sufficient capitalisation.
Ratings Withdrawn
ICRA has also withdrawn the rating assigned to the Rs. 1,000-crore Basel III Tier II bonds. This action follows the full redemption of these bonds, with no outstanding amount remaining.
Financial Performance Highlights
Union Bank reported a net profit of Rs. 4,116 crore in Q1 FY2026. Gross NPAs stood at 3.52%, and Net NPAs at 0.62% as of June 30, 2025. The regulatory capital adequacy ratio was 18.30%.
Source: BSE
