Union Bank of India has announced the reaffirmation of its credit ratings on various debt instruments by CRISIL Ratings. The ratings for Tier I Bonds (Under Basel III) are reaffirmed at Crisil AA+/Stable, and Tier II Bonds (Under Basel III) at Crisil AAA/Stable. Additionally, the rating on Rs. 1000 crore Tier II Bonds (Under Basel III) has been withdrawn following full redemption.
Credit Ratings Maintained
CRISIL Ratings has reaffirmed its ratings on the debt instruments of Union Bank of India (Union Bank). Tier I Bonds (Under Basel III) are at ‘Crisil AA+/Stable’, and Tier II Bonds (Under Basel III) are at ‘Crisil AAA/Stable’. The ratings reflect the expectation of strong support from the Government of India, adequate capital position, and sizable operations.
Withdrawal of Rating
The rating on Rs. 1000 crore of Tier II Bonds has been withdrawn, following independent confirmation that these instruments are fully redeemed, in line with CRISIL’s withdrawal policy.
Factors Supporting the Ratings
The ratings centrally factor in the expectation of strong support from the majority stakeholder, the Government of India (GoI), the bank’s adequate capital position, and sizeable scale of operations. These strengths are partially offset by average, though gradually improving, asset quality as well as profitability.
Asset Quality and Profitability
The Gross Non-Performing Assets (GNPA) ratio has decreased to 3.3% as of September 30, 2025, from 3.6% as of March 31, 2025, and 4.8% as of March 31, 2024. This reduction is driven by write-offs of fully provided non-performing assets and enhanced recovery efforts. Return on Assets (RoA) increased to 1.1% for both full fiscal 2025 as well as the first half of fiscal 2026 (annualized).
Capital Adequacy
The bank had raised additional equity capital of Rs 8,000 crore in fiscal 2024 via Qualified Institutional Placement (QIP). As of March 31, 2025, the Capital Adequacy Ratio (CAR) stood at 18.0%, and as of September 30, 2025, it was 17.1%.
Rating Sensitivities
Downward factors include any material change in shareholding and/or expectation of support from GoI, deterioration in asset quality, or decline in CAR below minimum regulatory requirements.
Bank Profile
Union Bank was nationalized in 1969. Post-amalgamation with Andhra Bank and Corporation Bank, Union Bank has total assets of Rs 14,90,323 crore as of September 30, 2025 and a branch network comprising 8,655 branches.
Financial Performance
The bank reported a consolidated profit of Rs 8419 crore in H1FY26, compared to Rs 8322 crore in H1FY25. For fiscal 2025, the profit was Rs 17,922 crore.
Source: BSE