India Ratings and Research (Ind-Ra) has affirmed Union Bank of India's (Union Bank) long-term issuer rating at 'AA+'. The outlook is stable.

Union Bank's Long-Term Issuer Rating is driven by Ind-Ra's expectation of continued strong support from the government of India (GoI). This reflects its majority ownership by GoI (74% including around 11% held by the Life Insurance Corporation of India ��" LIC) and its systemic importance as the sixth largest government-owned bank in terms of asset market share (3.8% as at FYE16).

The bank has been the beneficiary of steady capital injections by GoI in the past five years. In FY16, the bank received Rs 10.8 billion from GoI as a part of the Indradhanush framework (the government’s initiative to rejuvenate public sector banks-PSBs).

In its recent report, Ind-Ra continues to highlight that PSBs overall would continue to require a significant amount of capital even with a constrained growth trajectory during FY17-FY19. Also, following the clean-up under the asset quality review, NPL aging would continue to pressure credit costs well into FY17.

Shares of the bank gained Rs 1.25, or 0.93%, to trade at  Rs 136.30.  The total volume of shares traded  was  68,419 at the BSE (10.09 a.m., Thursday).