Union Bank of India (UNBK IN) – Q2FY27 Result Update – Adequate CET-1/LDR give comfort but LDR is high – ACCUMULATE
Published on 20 Oct 2026
UNBK saw a good quarter as core PPoP was a 3.2% beat driven by higher NII due to better reported NIM that increased by 6bps QoQ to 2.86% driven by (1) shedding of low yielding assets and (2) increase in LDR by 230bps QoQ to ~86%. Loan growth of 5.6% was broad based. FCNR(B) deposits of USD2.2bn were mobilized, of which 70% was leveraged. While loan growth is guided to mirror the system, we see loan CAGR of 12.5% over FY26-28E as we are watchful of deposit growth since LDR at ~86% provides limited headroom to grow. We keep multiple at 1.0x but raise TP to INR200 from INR190 as we roll forward to Sep’28 ABV. Retain ‘ACCUMULATE’.
