Union Bank Of India's Board approves debt issuance of nearly Rs 19,000 crore
New Delhi, July 30
Union Bank of India's board of directors on Thursday approved raising up to $2 billion or nearly Rs 19,145.93 crore in foreign currency funds, according to an exchange filing.
The proposed fundraise will be executed through the Medium Term Note Programme in tranche(s) by issuing of debt instruments via the bank's Dubai and/or Sydney branches, the state‑owned lender said.
The move follows an earlier approval of Rs 8,000 crore capital raising in May through a mix of equity and debt to strengthen the lender's capital base.
In a regulatory filing, the bank said its board had cleared a proposal to raise up to Rs 3,000 crore through equity issuance in one or more tranches.
The board also approved raising up to Rs 5,000 crore through Basel III-compliant Additional Tier-I and Tier-II bonds, including instruments denominated in foreign currencies.
Union Bank reported a net profit of Rs 5,332 crore for Q1 FY27, up 29.6 per cent from Rs 4,116 crore in previous year. Net interest income climbed nearly 10 per cent year‑on‑year to Rs 10,037 crore, while operating profit rose 15.8 per cent to Rs 8,003 crore.
Asset quality improved as gross non‑performing assets eased to 2.65 per cent from 2.82 per cent in the prior quarter. Net NPA stood at 0.47 per cent, marginally down from 0.48 per cent in the previous quarter.
Net interest income (NII), a key measure of core banking income, declined 1.1 per cent year-on-year in the March quarter to Rs 9,406 crore from Rs 9,514 crore in the corresponding quarter last year.
Shares of Union Bank ended 0.40 per cent lower at Rs 170.40 on the National Stock Exchange against the benchmark Nifty index that advanced 0.28 per cent. The stock has advanced 10.82 per cent year‑to‑date and around 30.32 per cent over the past 12 months.
— IANS
Reader Comments
Impressive 29.6% jump in net profit 🙌 And NII crossing Rs 10,000 crore - that's some serious numbers! But why is the share price falling when fundamentals look strong? Market seems confused. I'm holding my shares though, expecting good returns in long term.
As someone who follows Indian banking sector closely, this capital raising is well-timed. The improvement in NPA ratios shows disciplined management. However, the 1.1% YoY decline in NII for March quarter is slightly concerning - need to see if this continues or was just a blip.
Another day, another bank raising money 😅 PSU banks seem to be in perpetual capital raising mode. But credit where it's due - Union Bank's operating profit growth of 15.8% is solid. Just hope they don't dilute shareholders too much with this Rs 3,000 crore equity plan.
I'm a customer of Union Bank and honestly, I'd rather see improvements in customer service and digital banking than all these capital raising announcements. The stock has done well (up 30% in 1 year!) but ground-level experience for retail customers still needs work. Good for investors though!
Smart move to raise via Dubai/Sydney branches and tap foreign markets. AT1 bonds at 8-9% coupon in global market might be cheaper than domestic options. The stock price dip today seems unjustified given the strong Q1 performance. Might add more to my portfolio! 📈
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