Union Bank of India Shares Plummet 10% in Two Days Following Q4 Earnings Report
Union Bank of India shares fall 10% in two days after Q4 earnings. What's spooking investors?
The Economic Times
Image: The Economic Times
Union Bank of India shares fell 10% over two days, dropping another 2% to ₹175.52 after disappointing Q4 FY26 earnings. Despite a 6.6% year-on-year profit rise, concerns over net interest income decline and increased provisions spooked investors, prompting a neutral rating from Motilal Oswal.
- 01Union Bank of India's shares fell 10% in two days after Q4 FY26 results.
- 02Net profit rose 6.6% year-on-year, but net interest income declined over 1%.
- 03Provisions increased nearly three-fold to ₹1,055 crore from ₹322 crore.
- 04Motilal Oswal maintains a 'Neutral' rating with a target price of ₹180.
- 05Asset quality improved with gross NPA ratio declining to 2.82%.
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Shares of Union Bank of India experienced a 10% decline over two days, trading at ₹175.52 after the release of its fourth quarter earnings for the financial year 2026. The bank reported a 6.6% year-on-year increase in net profit to ₹5,316 crore, but net interest income (NII) fell by over 1% to ₹9,406 crore. Provisions surged to ₹1,055 crore, up from ₹322 crore in the previous quarter, raising concerns among investors. Despite these setbacks, the bank's asset quality showed improvement, with the gross non-performing asset (NPA) ratio decreasing to 2.82% and the net NPA ratio to 0.48%. Motilal Oswal maintained a 'Neutral' rating on the bank's shares, setting a target price of ₹180, indicating limited upside potential. They noted that while the bank's net profit surpassed estimates due to NPA recoveries, the lower NII and higher provisions offset this positive performance. The management has projected loan growth of 12-14% and aims to maintain a comfortable credit-deposit ratio of 82-83%.
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The decline in share price may affect investor confidence and the bank's ability to raise capital in the future, potentially impacting loan availability for customers.
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