Credit Rating

संदभग Ref.:नि.से.नव.ISD/221/2026-27 नदिांक Date : 07.10.2026 बीएसई निस्टंग सेंटर BSE Listing Centre National Stock Exchange of India Ltd. स्िप कोि Scrip Code - 532 477 निप्स NEAPS स्िप कोि Scrip Symbol-UNIONBANK-EQ Subject: Reporting under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In terms of Regulation 30 read with point 3 of Para A of Part A of Schedule Ill of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and SEBI circular no. CIR/CFD/CMD/4/2015 dated September 9, 2015, we wish to inform that S&P Global Ratings on October 06, 2026, the rating agency has reaffirmed the Bank’s Issuer credit Ratings as per following details: Verificat Name of ion Specify Date Date the status of Previous Credit Rating Rating other of of S. No ISIN Credit Outlook Credit Parameter Rating assigned Action rating Credit Verific Rating Rating action Rating ation Agency Agencie Issuer BBB/Stable/ BBB/Stable Credit NA A-2 /A-2 Ratings S & P INE692 06.10. 06.10. 1 Global SACP bbb- bbb- Stable R eaffirmed NA Verified A01016 2026 2026 Ratings Anchor bbb- bbb- NA The rating rationale is enclosed herewith. Thanking you. भवदीय Yours faithfully, (Ashish Mishra) Company Secretary Union Bank of India, Investor Services Division, Union Bank Bhavan,239, Vidhan Bhavan Marg, Nariman Point, Mumbai - 400021. : + 91 22 2289 6636/2289 6643, investorservices@unionbankofindia.bank.in , website: www.unionbankofindia.bank.in Union Bank of India October 6, 2026 This report does not constitute a rating action. Primary Contact Aurick Soh Ratings Score Snapshot Singapore 65-6216-1134 SACP: bbb- Support: +1 Additional factors: 0 aurick.soh @spglobal.com Anchor bbb- Issuer credit rating ALAC support 0 Secondary Contact Business Adequate 0 position Deepali V Seth Chhabria Capital and earnings Adequate 0 GRE support 1 Mumbai Risk 912261373187 Moderate -1 position BBB/Stable/A-2 deepali.seth Funding Strong Group support 0 @spglobal.com Liquidity Strong Sovereign support 0 CRA adjustment 0 ALAC--Additional loss-absorbing capacity. CRA--Comparable ratings analysis. GRE-- Government-related entity. ICR--Issuer credit rating. SACP--Stand-alone credit profile. Credit Highlights Overview Key strengths Key risks Very high likelihood of government support Higher level of stressed assets than the industry Stable deposit base and strong liquidity due to a well‑established Lower proportion of current account and savings franchise and government parentage account (CASA) deposits dampens margins Union Bank of India will maintain a steady capital cushion. We estimate the bank's risk-adjusted capital (RAC) ratio will stay above 7% over the next 12-24 months, with support from stable earnings. We believe its capital buffers will be sufficient to absorb a one-off impact from the transition towards the expected credit loss (ECL) framework. Union Bank's asset quality should stay stable, in our view. The bank has improved its asset quality by writing off and selling nonperforming loans, along with better risk management www.spglobal.com/ratingsdirect October 6, 2026 1 Union Bank of India processes. It has low exposure to riskier segments such as unsecured loans, micro, small and midsized enterprises (MSMEs), and microfinance. That said, we forecast Union Bank's ratio of weak loans to increase to 3.5%-3.7% over the next two years, from 3.3% as of June 30, 2026. This is because we anticipate a moderate rise in credit stress for the Indian banking sector due to the effects of the Middle East conflict, as well as weaker monsoon rains in the country. Union Bank's credit costs will also tick up amid higher provisioning requirements under the ECL framework, and as recoveries on legacy weak loans taper off. Outlook The stable rating outlook on Union Bank reflects our view that the bank will maintain its improved capital position over the next 24 months, and the likelihood of government support for the bank will remain very high. Downside scenario We could lower the ratings if we downgrade India or if we revise downward our assessment of Union Bank's stand-alone credit profile (SACP). The SACP could weaken by a notch if Union Bank's funding profile deteriorates. This could be indicated by a lower deposit market share, a sustained drop in low-cost deposits, or a sustained increase in the bank's loan-to-deposit ratio. We could also revise our assessment of the SACP downward if Union Bank's risk management and asset quality weaken materially. Upside scenario We could upgrade Union Bank if we raise the sovereign ratings on India and revise our assessment of the bank's SACP upward. Union Bank's SACP could rise by a notch if its asset quality improves to a level similar to that of larger Indian banks. Key Metrics Union Bank of India‑‑Key ratios and forecasts ‑‑Fiscal year ended March 31 ‑‑ (%) 2025a 2026a 2027f 2028f 2029f Growth in operating revenue 7.5 0.6 9.5‑11.5 9.5‑11.5 9.5‑11.5 Growth in customer loans 9.8 8.6 11.0‑13.0 11.0‑13.0 11.0‑13.0 Growth in total assets 7.8 4.9 10.0‑11.0 10.0‑11.0 10.0‑11.0 Net interest income/average earning assets (NIM) 2.8 2.6 2.6‑2.7 2.7‑2.8 2.7‑2.8 Cost‑to‑income ratio 50.9 54.5 52.0‑54.0 51.0‑53.0 51.0‑53.0 Return on average common equity 17.1 15.7 13.0‑14.0 13.0‑14.0 13.0‑14.0 Return on assets 1.2 1.3 1.1‑1.2 1.1‑1.2 1.1‑1.2 New loan loss provisions/average customer loans 0.4 0.0 0.2‑0.3 0.3‑0.4 0.3‑0.4 Gross nonperforming assets/customer loans 4.5 3.6 3.6‑3.8 3.6‑3.8 3.6‑3.8 Net charge‑offs/average customer loans 0.8 0.2 0.2‑0.3 0.2‑0.3 0.2‑0.3 www.spglobal.com/ratingsdirect October 6, 2026 2 Union Bank of India Union Bank of India‑‑Key ratios and forecasts ‑‑Fiscal year ended March 31 ‑‑ (%) 2025a 2026a 2027f 2028f 2029f Risk‑adjusted capital ratio 8.8 9.3 9.0‑9.3 8.6‑8.9 8.5‑8.8 All figures include S&P Global Ratings' adjustments. a‑‑Actual. f‑‑Forecast. NIM‑‑Net interest margin. Anchor: 'bbb-' For Banks Operating Primarily In India The starting point for our ratings on Union Bank is 'bbb-', the same for any bank operating predominantly in India. We expect the Indian financial sector's asset quality to remain healthy. Our opinion reflects structural improvements in operating conditions and good economic prospects over the next few years. Nonetheless, we note some emerging strains due to global uncertainty, including from the ongoing Middle East conflict, which could lead to some pressure on weaker borrowers. Pockets of stress are likely to emerge in unsecured segments in India, particularly among self- employed borrowers and micro- and small-sized enterprises, with potential spillovers into vehicle loans and affordable housing. We believe uneven economic growth and persistently high food inflation will exert sustained pressure on low-income borrowers, given their limited income buffers and high share of essential consumption. Meanwhile, regulatory guardrails imposed by Microfinance Institutions Network, a self-regulatory organization for microfinance institutions in India, have led to a moderation in borrower leverage and contraction in microfinance portfolios, helping to address prior excesses. We believe underwriting standards in India for secured retail loans are healthy, and delinquencies in this segment will remain manageable. We expect credit losses could inch up to 0.8%-1.0% over the next 12-24 months, compared with the low levels of 0.7% in fiscal 2026 (ended March 31, 2026). The increase is also in part due to the implementation of expected credit loss framework for asset classification in India from next year. However, the credit losses compare favorably with the sector's long-term average of 1.5%. We project Indian banks' return on average assets (ROAA) to be 1.2%-1.3% for fiscal 2027, comparable with that of global peers. In our view, directed lending by the government and the presence of many government-owned banks distort competition in the banking sector. Weak governance and transparency undermine the in [Showing first 8,000 characters — download PDF for full document]