Union Bank of India shares dip after announcement of Q4FY25 business update

Indian stock market: Shares of Union Bank of India crashed 5% in trading session on Friday, April 04, reaching ₹124.77, following the release of the bank's Q4 FY25 (fourth quarter) business update.

In a filing to the exchange today, the public sector lender reported an 7.85% improvement in its total business, reaching ₹22,92,625 crore, for the quarter ending March.

The bank's gross advances stood at ₹9,82,875 crore in Q4 FY25, an increase of 8.62% compared to Q4 FY24 gross advances of ₹9,04,884 crore. Additionally, the total deposits of the bank grew by 7.22% YoY to ₹13,09,750 crore in Q4 FY25.

The domestic Current Account and Savings Account (CASA) stood at ₹4,26,242 crore in Q4, marking a 3.94% increase from ₹4,10,071 crore. Domestic Retail Advances jumped 22.14% YoY to ₹2,16,777 crore, as per the bank's filing.

Q4FY25 preview: What to expect from PSU bank earnings?

Domestic brokerage firm Motilal Oswal expects PSU banks to report modest earnings growth of 4.5% year-on-year (YoY) (up 4.8% quarter-on-quarter) amid a slight decline in net interest margins (NIMs), offset by controlled operating expenses and a pick-up in other income. Net interest income (NII) is projected to see a modest 2.8% YoY growth as NIMs remain under pressure. Accordingly, the brokerage estimates PSU banks will report a 9% compound annual growth rate (CAGR) in aggregate earnings over FY25-27.

"Operating expenses are likely to remain under control and should follow a normalized trajectory for PSU banks. Treasury performance is expected to improve quarter-on-quarter amid a decline in bond yields, though equity markets have remained volatile," the brokerage said.

On the asset quality front, Motilal Oswal expects stability. "While Q3 witnessed a rise in the SMA (Special Mention Accounts) pool for some banks, it is expected to recover without leading to slippages. Consequently, credit costs should remain largely under control. The newly revised norms for the sale of government-guaranteed Security Receipts (SRs) should release excess provisions for PSU banks, which they can utilize for potential requirements," the brokerage added.

Meanwhile, Union Bank of India's standalone net profit jumped 27.53% to ₹4623 crore in Q3 FY25, compared to ₹3,625 crore in Q3 FY24. Total income increased 6.32% to ₹27,135 crore in Q3 FY25, compared to ₹25,521 crore in the corresponding quarter of the previous year.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.