Union Bank of India shares slide after single-digit loan growth for fifth straight quarter

Shares of state-run Union Bank of India Ltd. fell on Friday, October 3, in response to the quarterly business update shared by the lender.

Total gross advances or loan growth for the quarter stood at 5.3% to ₹9.42 lakh crore. On a sequential basis, loan growth stood at 0.4%. This is the fifth straight quarter that Union Bank has reported single-digit growth in gross advances.

Deposits for the quarter increased by 1.9% from the same quarter last year to ₹12.34 lakh crore. When compared to the June quarter, the deposit growth stood at a negative 0.4%. Deposit growth was also in single digits for the seventh quarter in a row.

Domestic advances in the RAM (Retail, Agri, MSME) segment stood at 9.3% to ₹5.54 lakh crore during the September quarter. The management had earlier highlighted that it will be able to sustain the double-digit growth in the RAM segment, but it has failed to achieve that this quarter.

Growth in the RAM segment this quarter has been led entirely by the retail loans, which grew by 24% from last year. On a sequential basis, growth in the RAM segment stood at 1.7%.

At the end of the September quarter, Domestic CASA stood at ₹4.01 lakh crore, a growth of 1.4% from last year and a decline of 0.3% from the previous quarter.

Shares of Union Bank of India have slumped to the lows of the day, currently trading 2.1% lower at ₹135.9. The stock had rallied 8% in the last one month.