Union Bank Approves Fundraise Of Up To Rs 25,000 Crore Via Long-Term, Green Bonds
The lender will raise long-term bonds amounting up to Rs 20,000 crore, and green or sustainable bonds up to Rs 5,000 crore.
The board of directors of Union Bank of India approved on Wednesday a proposal to raise funds of Rs 25,000 crore via bonds, according to an exchange filing on Wednesday.
The lender will raise long-term bonds amounting up to Rs 20,000 crore towards financing infrastructure and affordable housing. Union Bank will also raise green or sustainable bonds to the tune of Rs 5,000 crore, it said.
This development comes on the back of the Reserve Bank of India's recent announcement of several measures, including bond purchases through open market operations worth Rs 60,000 crore, a 56-day variable rate repo auction for Rs 50,000 crore and a $5 billion dollar-rupee buy-sell swap auction for six months.
Analysts believe these actions will boost liquidity and benefit both banking and non-banking lenders. Citi Research views the move as "sentimentally positive" for banks with a high loan-to-deposit ratio.
Union Bank Q3 FY25 Highlights (Standalone, YoY)
NII up 1% to Rs 924 crore versus Rs 916.8 crore.
Net profit up 28% to Rs 4,604 crore versus Rs 3,590 crore.
Net NPA at 0.82% versus 0.98%.
Gross NPA at 3.85% versus 4.86%.
The bank's global deposits have increased by 3.76% yearly, and the total deposits base is Rs 12 lakh crore as of Dec. 31, 2024. The bank's return on assets improved by 23 basis points to 1.3% and the return on equity improved by 50 basis points to 17.75% during the quarter in question, the lender said in a press release.
Shares of Union Bank closed 1.75% higher at Rs 112.54 apiece on the National Stock Exchange, compared to a 0.9% advance in the benchmark Nifty.
