Why Union Bank Share Price is Falling

Public sector bank stocks have been buzzing lately, thanks to the reports of nearly 15 subsidiaries and joint venture being lined up for IPOs or strategic disinvestment in the coming years.

The market has been upbeat, riding on hopes of value unlocking in the PSU banking space.

However, amid the excitement, one stock that stole the spotlight for all the wrong reasons is Union Bank. While the sector surged on disinvestment hopes, Union Bank's share price took a sudden tumble grabbing headlines for its unexpected decline.

Let's explore what's fuelling the decline.

Growth Slowdown

Shares of Union Bank tanked 5.5% today following the release of its Q1 FY26 business update. The decline was triggered by concerns over the bank's slower growth in deposits and loans compared to the previous quarter.

The bank reported growth over the past year but also declines in key areas compared to the previous quarter. Domestic savings deposits, total global business, and total global deposits all saw declines.

Total global business stood at Rs 221.45 billion (bn) as of June 2025, a 5% year-over-year (YoY) growth, but a 1.8% quarter-over-quarter (QoQ) decline.

The bank's global deposits dropped 2.5% from the previous quarter to Rs 123.9 bn but still grew 3.6% compared to last year. Domestic deposits followed a similar trend, falling 2.5% QoQ to Rs 123.9 bn while showing a 3.6% YoY growth.

Domestic savings and current account deposits (CASA) took a hit, dropping 5.4% from the previous quarter to Rs 4,030 bn. Although it's up slightly 0.9% from last year. The big quarterly fall is a concern, as low-cost deposits are crucial for the bank's profitability.

Global loan advances stood at Rs 9,750 bn, down 0.8% from the previous quarter, but up 6.8% compared to last year. Domestic loans dropped 0.8% QoQ to Rs 9,380 bn but grew 6.7% YoY.

What Next?

Moving forward, Union Bank of India plans to raise Rs 60 bn through shares and bonds to boost its capital and support growth, as decided in a board meeting on 25 June 2025.

It aims to secure Rs 30 bn through equity issuance in multiple tranches, using methods like rights issues or private placements. This will strengthen the bank's capital base, helping it meet regulatory requirements and support growth.

The bank will keep investing in digital tech to make online banking better for customers and more efficient for operations.

How Union Bank Share Price Has Performed Recently

Over the past month, the share price of Union Bank has declined 7%, but over the last six months, it's up 33.5%.

The stock touched its 52-week high of Rs 158.6 on 3 June 2025 and a 52-week low of Rs 100.7 on 13 January 2025.

About Union Bank of India

Incorporated in 1919 in Mumbai, Union Bank was nationalised in 1969.

The bank provides a variety of financial services, including short and long-term credit for agriculture, small industries, and the tertiary sector.

It offers corporate banking solutions like trade finance and project financing, along with services for non-resident Indians (NRIs), such as treasury and remittance services.

Amalgamation of Andhra Bank and Corporation Bank into Union Bank was effective from 1 April 2020. The merged entity has a larger balance sheet and wider geographical reach.

To know more, check out Union Bank's financial factsheet and its latest quarterly results.

You can also compare Union Bank with its peers on our website.

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