Union Bank's stock slips 6%. Blame a book

Union Bank of India delivered a strong set of Q4 numbers on Monday—net profit jumped 61 per cent year-on-year to Rs 4,623 crore. But instead of celebrating, the market punished the stock.

It fell nearly 6 per cent to close at Rs 118 today on the BSE.

The reason? A strange twist involving a book. Not a bad loan. Not weak margins. A book.

The Rs 7.25 crore plot twist

Turns out, Union Bank had quietly spent Rs 7.25 crore to buy nearly 2 lakh copies of a book titled India@100, written by former Chief Economic Adviser Krishnamurthy Subramanian.

What raised eyebrows wasn't the author or the title, but the process and the purpose.

According to reports, the bank bought the books in bulk before publication. The orders came from the top and were split across 18 zones. The books were to be given to customers, colleges, and libraries.

But here's the kicker: the money for this "financial literacy" push was drawn from a discretionary budget line item—miscellaneous expenses. No open tender. No competitive bidding. Just a quiet Rs 7 crore cheque to the publisher.

Employee unions are now asking tough questions. And so are investors.

Earnings strong, sentiment weak

Let's not forget, the numbers weren't bad.

• Net profit: Rs 4,623 crore (+61 per cent YoY)
  
• Gross advances: Rs 9.82 lakh crore (+8.6 per cent)
  
• Retail loans: Rs 2.16 lakh crore (+22.1 per cent)
  
• CASA: Rs 4.26 lakh crore (+3.9 per cent)
  
• Total deposits: Rs 13.09 lakh crore (+7.2 per cent)

But in markets, perception often trumps performance. And governance red flags—no matter how seemingly small—can knock the wind out of a stock. Especially in PSU banks, where investor trust is always a fragile thing.

Value Research Online Ratings

Value Research Stock Rating gives Union Bank an overall rating of 3 stars out of 5. The company's specific scores are as follows:

• Quality Score: 3/10
  
• Growth Score: 4/10
  
• Valuation Score: 7/10
  
• Momentum Score: 6/10

Is the stock now a buy?

At current levels, Union Bank trades at a P/E of 5.5 and a dividend yield of 2.85 per cent—cheap by all traditional measures. Return on equity is healthy. Asset quality is stable.

But the book saga has spooked investors for a reason. It points to old-school PSU behaviour: lack of transparency, questionable spending, and unclear accountability.

If you're a long-term investor, it may be worth watching how the bank handles this internally. Does it investigate? Does it explain? Does it course-correct?

Because ultimately, it's not just about what's on the balance sheet—it's about how the institution behaves off it.

Final word

Union Bank made a Rs 4,600 crore profit last quarter. But it's a Rs 7 crore book that may cost it much more in investor goodwill.

The message from the market is loud and clear: even small governance slip-ups aren't going unnoticed. Especially when the rest of the banking pack is working hard to clean up its act.

Until Union Bank clears the air, the stock may stay stuck in the penalty box.

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Disclaimer: This story was created with the assistance of artificial intelligence and is intended for informational purposes only. Please take it with a pinch of salt and do your own research or consult a financial advisor before making investment decisions.