Bank of India vs Union Bank (2026): ROA, NIM, NPAs, Growth & Which Is Better?

Bank of India vs Union Bank: Q1 FY2027 scoreboard

Union does this without a better CASA ratio

Bank of India CASA is approximately 36.68%.

Union is around 35.10%.

BOI therefore has slightly more low-cost CASA funding proportionally.

Yet Union has the wider NIM.

This suggests Union's advantage currently comes more from overall asset-liability pricing and mix than simply CASA.

Union's deposit strategy has also been selective

Total deposits grew only around 3.5%.

Management has intentionally reduced expensive bulk funding while trying to improve granular liabilities.

That helps defend margin.

But it creates another problem.

Loans are still growing double digits.

A 3.5% deposit-growth rate cannot permanently support 12%-plus credit growth

The current mismatch can persist temporarily because Union entered the period with existing liquidity and alternative funding options.

Over time, however, sustainable loan growth needs sustainable liability growth.

This makes deposit acceleration one of the most important forward indicators for Union.

Bank of India's balance sheet is growing faster almost everywhere

Retail:

+20.60%.

MSME:

+19.34%.

Agriculture:

+18.92%.

Corporate:

+18.44%.

That consistency is important.

The bank does not rely on one rapidly expanding vertical to produce the 18.64% overall growth rate.

Union is growing more selectively

Union's approximately 12.5% advance growth is still healthy.

The bank has focused on profitable RAM and selected corporate opportunities rather than maximising headline balance-sheet expansion.

This more measured growth contributes to the quality argument behind Union's higher valuation.

The decisive metric in Union's favour is ROA

1.36% versus 1.01%.

A 35-basis-point difference in banking is substantial.

Union currently creates approximately 35% more profit per rupee of assets on a relative basis than Bank of India.

This is the strongest fundamental justification for the 1.08x book valuation.

Why is Bank of India's ROA only 1.01% despite lower credit cost?

BOI has several advantages:

• 0.15% credit cost.
• 1.81% GNPA.
• rapid loan growth.
• healthy operating efficiency.

Yet Union still produces more ROA.

The answer is that profitability is the product of the full asset and income mix.

Union's wider NIM, income structure and overall balance-sheet productivity currently outweigh BOI's lower credit burden.

ROE narrows the profitability difference

Union Bank:

17.23%.

Bank of India:

16.12%.

The gap is only about one percentage point.

So Union's ROA advantage does not translate into an equally dramatic return-on-equity advantage.

Part of the reason is common-equity capital

Union CET1 is approximately 16.38%.

Bank of India is around 15.97%.

Union carries slightly more high-quality common-equity capital relative to risk-weighted assets.

Higher capital reduces financial leverage.

This can suppress ROE even when ROA is stronger.

Both banks are very well capitalised

Total capital adequacy:

Bank of India 18.69%.

Union Bank 18.46%.

Neither currently looks constrained by regulatory capital.

The strategic constraints are more about funding quality, profitability and credit discipline.

Bank of India has the clearly cleaner gross loan book

GNPA: 1.81% versus Union at 2.65%.

The 84-basis-point gap is meaningful.

BOI currently carries substantially fewer recognised gross stressed loans relative to advances.

Net NPA is almost tied because Union provisions more aggressively

Bank of India:

0.51%.

Union Bank:

0.47%.

Union's provision coverage is around 95.05% versus BOI at 93.83%.

This reduces Union's residual unprovided exposure despite the larger gross NPA stock.

Bank of India's slippage ratio is a major quality signal

Approximately 0.24%.

This indicates very little new stress entered the NPA pool during the quarter relative to the loan book.

That is especially encouraging because BOI is simultaneously growing advances nearly 19%.

The caveat is timing

Fresh loans often require several quarters before underwriting problems become visible.

Today's slippage ratio mainly describes earlier loan vintages.

Therefore BOI's rapid FY27 growth should be monitored through future SMA and delinquency data rather than declared risk-free based on one quarter.

Credit cost creates Bank of India's biggest profitability counterargument

BOI: approximately 0.15%.

Union: approximately 0.38%.

BOI currently spends materially less of its operating income absorbing credit losses.

If the gap remains while BOI's NIM improves even modestly, its ROA can begin converging with Union's.

That is the most important upside route for Bank of India

BOI does not need to become a 3% NIM bank.

Suppose the bank:

• keeps credit cost below 0.5%.
• maintains cost-to-income below 48%.
• keeps GNPA below 2%.
• moves NIM modestly above the current 2.52%.

ROA could improve from the current 1.01% without relying on 19% credit growth indefinitely.

Union's operating efficiency is marginally better

Cost-to-income:

Union 45.34%.

Bank of India 46.33%.

The difference is less than one percentage point.

Both banks are already operating at reasonably efficient levels for public-sector lenders.

This means future ROA divergence is unlikely to come from a giant cost-ratio gap.

Union's Q1 earnings conversion was strong

NII increased approximately 10.1%.

PAT increased approximately 29.5%.

Lower expenses and provisions helped convert moderate revenue growth into much faster bottom-line growth.

This supports the current high ROA.

But Union cannot compound forever through declining provisions

Credit cost is already low.

Asset quality is already much improved.

Operating costs cannot decline every year.

Future earnings increasingly need:

• deposit growth.
• NII growth.
• fee growth.
• credit expansion.

to carry more of the burden.

Bank of India's recurring growth bridge is currently stronger

NII +12.61%.

Operating profit +25.99%.

PAT +36.23%.

The sequential acceleration through the income statement indicates powerful current operating leverage.

Investors should still distinguish recurring drivers such as NII from volatile items such as treasury or recovery income, but the overall direction is favourable.

Is the premium justified?

At today's fundamentals, partially yes.

Union delivers:

• higher ROA.
• higher NIM.
• slightly higher ROE.
• slightly better cost-to-income.
• slightly stronger CET1.

Those metrics deserve a premium.

The question is whether they deserve a 37% P/B premium when BOI is growing faster and carries lower GNPA and credit cost.

Bank of India is priced as if 1% ROA may not last

A bank trading at 0.79x book despite:

• 16% ROE.
• 1.01% ROA.
• 1.81% GNPA.
• 0.15% credit cost.
• 18.64% loan growth.

is being assigned a substantial durability discount.

If today's returns prove sustainable through another credit cycle, the below-book valuation can rerate even without ROA reaching Union's level.

Union's valuation requires preservation more than transformation

Union already produces 1.36% ROA.

It does not need a dramatic profitability turnaround.

It needs to protect:

• NIM near 2.8%.
• ROA around 1.3%.
• cost-to-income below 47%.
• credit cost below 0.5%.

while solving the weak deposit-growth equation.

Bank of India's valuation requires less perfection

The stock does not need to earn 1.36% ROA to justify a move closer to book value.

A bank sustaining:

• ROA around 1.05%-1.15%.
• ROE in the mid-to-high teens.
• GNPA below 2%.
• mid-teens loan growth.

could reasonably command a stronger valuation than a persistent 0.79x book discount.

This creates the classic quality-premium versus value-rerating trade

Union Bank:

Pay more for higher profitability already delivered.

Bank of India:

Pay less and rely on continued improvement plus multiple normalisation.

Neither approach is automatically superior.

They simply require different things to go right.

The Bull Run snapshot shows Union has already enjoyed far stronger momentum

Union's momentum creates an additional near-term consideration

RSI above 80 in Bull Run's August 25 snapshot indicates extremely strong short-term price momentum.

That is not a reason to reject a fundamentally strong stock.

It does mean the quality thesis has already attracted considerable recent market attention.

Bank of India sits in a very different sentiment position

Its three- and six-month returns were negative despite strong Q1 operating metrics.

This creates a mismatch between recent fundamental progress and price momentum.

Such mismatches can become opportunities when fundamentals persist.

They can also mean the market is anticipating risks not yet visible in current earnings.

Bank of India vs Union Bank FAQs

Which bank is larger?

Union Bank, with approximately ₹12.83 lakh crore of deposits versus Bank of India at ₹9.58 lakh crore.

Which is growing loans faster?

Bank of India at approximately 18.64% versus Union Bank around 12.5%.

Which is growing deposits faster?

Bank of India by a wide margin, approximately 14.90% versus Union Bank around 3.5%.

Which has higher NIM?

Union Bank at approximately 2.80% versus Bank of India at 2.52%.

Which has higher ROA?

Union Bank at approximately 1.36% versus Bank of India at 1.01%.

Which has higher ROE?

Union Bank at approximately 17.23% versus Bank of India at 16.12%.

Which has lower GNPA?

Bank of India at 1.81% versus Union Bank at 2.65%.

Which has lower NNPA?

Union Bank marginally, 0.47% versus Bank of India at 0.51%.

Which has lower credit cost?

Bank of India by a wide margin, approximately 0.15% versus Union Bank at 0.38%.

Which stock is cheaper?

Bank of India on both late-August P/E and P/B.

Where can investors compare them on Bull Run?

Use the Bank of India stock page, Union Bank stock page and Public Sector Bank sector page.

Research sources

• Bull Run — Bank of India
• Bull Run — Union Bank
• Bull Run — Public Sector Bank sector research
• Bank of India official financial results
• Bank of India investor relations
• Union Bank official Q1 FY2027 results and investor materials