Union Bank of India on Wednesday reported a 29.6% year-on-year rise in its net profit to Rs 5,332 crore for the quarter ended June, aided by a strong growth in net interest income (NII) and improved asset quality.

“We have improved our credit growth and asset quality, which have led to higher profits during the quarter. We are bringing down high-cost deposits and making efforts to boost lower-priced CASA (current account savings account) deposits,” Managing Director and CEO Asheesh Pandey said.

The NII rose 10.1% YoY to Rs 10,037 while the net interest margin (NIM) improved to 2.80% from 2.76% in the year-ago period.

Operating profit grew 15.8% to Rs 8,003 crore while credit cost improved to 0.38% from 0.47% a year earlier.

Non-interest income rose 2.6% YoY to Rs 4,603 crore, but fell 15% sequentially from Rs 5,412 crore, mainly due to a 45% YoY rise in fee-based income to Rs 3,215 crore. Treasury income, however, declined 54.5% YoY to Rs 645 crore.

The asset quality improved with the gross non-performing assets (NPA) declining to 2.65% from 3.52% a year ago and 2.82% in the previous quarter.

The gross NPAs reduced to Rs 29,093 crore from Rs 34,311 crore. Gross reduction of Rs 3465 crore consisted of a cash recovery of Rs 913 crore, upgradation of Rs 279 crore, and write-offs of Rs 2,273 crore.

Net NPA stood at 0.47%, compared to 0.62% a year earlier and 0.48% in Q4FY26.

The bank’s slippage ratio eased to 0.82% from 0.99%. Provisions declined 4.4% to Rs 2,670 crore in the June quarter. Provision coverage ratio improved to 95.05% from 94.65% a year ago.

The total loan book grew 12.5% YoY to Rs 10.96 lakh crore. Domestic credit rose 13.1% to Rs 10.61 lakh crore, with corporate loans seeing a 15.32% rise to Rs 4.42 lakh crore. Retail loans grew 12.1% YoY, MSME 16.5% and agriculture advances by 6.8%. Overall, RAM (retail, agriculture and MSME) advances grew 11.6% to Rs 6.08 lakh crore.

Deposits grew slower by 3.5% YoY to Rs 12.83 lakh crore. The domestic CASA ratio improved to 35.10% from 32.52%.

Plans to raise $2 bn via dollar swap route

Union Bank plans to raise $1.5-$2 billion under the Reserve Bank of India’s new dollar-swap window, Managing Director and CEO Asheesh Pandey said.

The bulk of this will be through FCNR(B) deposits, while $200 million-$300 million will be via overseas foreign currency borrowings.

The bank has already mobilised $106 million in FCNR (B) deposits through its NRI branches in Dubai, the UK and Australia, Pandey said.

The bank will also raise Rs 8,000 crore, of which Rs 5,000 crore will be through equity and the remaining via bonds.