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City Union Bank has reported 18% growth in net profit at Rs 152.13 crore for the quarter ended March 2018. The bank has posted healthy 18% growth in net interest income (NII), while the core fee income of the bank also improved 17% in Q4FY2018. The Net Interest Margin (NIM) of the bank improved to 4.36% in Q4FY2018 compared to 4.20% in the corresponding quarter of previous year.
On business front, the bank as has posted 13% growth in business with strong 17% surge in loan book. The asset quality of the bank has improved in Q4FY2018. Bank has substantially improved the credit to deposit ratio to 86.0% at end March 2018 from 80.1% at end March 2017. Further, the CASA ratio of the bank has also improved to 24.2% at end March 2018 from 23.4% at end March 2017.
Asset quality improves: The bank has improves asset quality in Q4FY2018 with higher NPA reductions.
- The fresh slippages of loans stood at Rs 148.2 crore in Q4FY2018, while the recovery, upgradations and write-off together were higher at Rs 151.5 crore.
- The restructured advances book stood at mere Rs 8.1 crore at end March 2018.
- The stressed assets (NNPA and standard restructured asset) of the bank stood at 1.71% of advances at end March 2018 down from 2.26% end March 2017.
| Asset Quality Indicators: City Union Bank |
|
201803 |
201712 |
201709 |
201706 |
201703 |
Variation |
| QoQ |
YoY |
| Gross NPA (Rs Crore) |
856.55 |
859.79 |
780.39 |
734.96 |
681.98 |
0 |
26 |
| Net NPA (Rs Crore) |
474.78 |
447.82 |
440.98 |
425.96 |
408.34 |
6 |
16 |
| % Gross NPA |
3.03 |
3.30 |
3.07 |
3.05 |
2.83 |
-27 |
20 |
| % Net NPA |
1.70 |
1.74 |
1.76 |
1.79 |
1.71 |
-4 |
-1 |
| % Provision Coverage Ratio |
64.00 |
65.00 |
63.00 |
62.00 |
60.00 |
-100 |
400 |
| % CRAR - Basel III |
16.22 |
14.93 |
15.31 |
15.87 |
15.83 |
129 |
39 |
| Tier I - Basel III % |
15.79 |
14.47 |
14.86 |
15.40 |
15.36 |
132 |
43 |
| Variation in basis points for figures given in percentages and in % for figures in Rs crore |
Business Highlights:
Healthy loan growth drives business growth: The business of the bank has increased 13% YoY to Rs 61091 crore end March 2018, driven by 17% surge in advances to Rs 28239 crore. Deposits rose 9% to Rs 32853 crore at end March 2018.
CASA deposits ratio improves: The CASA deposits of the bank increased 13% YoY to Rs 7957 crore at end March 2018. The CASA ratio moved up to 24.2% at end March 2018 compared to 23.4% at end March 2017.
Strong loan growth: Advances growth was driven by retail loans rising 22% YoY to Rs 3271 crore at end March 2018, while credit to large industries also increased 7% to Rs 1889 crore, wholesale traders 25% to Rs 4085 crore and MSME 34% to Rs 9581 crore at end March 2018. However, the credit to agriculture declined 6% YoY to Rs 4083 crore at end March 2018.
The share of secured loans rose marginally to 98.8% at end March 2018 from 98.6% at end March 2017. The share of retail, agriculture and MSME loans also moved up to 60.0% at end March 2018 from 58.9% a year ago.
Investment book of the bank increased 13% YoY to Rs 8015 crore at end March 2018. The AFS book surged 60% to Rs 2013 crore, while HTM book rose 3% to Rs 6002 crore at end March 2018. The AFS book duration stood at 1.5 years with the overall investment portfolio duration at 4.31 years at end March 2018.
Margins improve: The bank has showed sharp 47 bps YoY decline in cost of funds to 5.23%, while yield on fund declined 25 bps YoY to 9.06% in Q4FY2018. Thus, the NIM has improved 16 bps YoY to 4.36%.
Branch expansion: The bank has added 39 branches, 37 ATMs and 270 staff in Q4FY2018, taking overall tally to 600 branches and 1621 ATM's and 5319 employees end March 2018.
Book value of the bank stood at Rs 62.6 per share at end March 2018, while the adjusted book value (net of NNPA and 10% of restructured advances) was Rs 55.5 per share at end March 2018.
Quarterly Performance
NII rises as NIM improves: Bank has recorded 9% increase in the interest earned at Rs 870.66 crore, while interest expenses rose 3% to Rs 502.72 crore in Q4FY2018. NII improved 18% to Rs 367.94 crore in the quarter ended March 2018.
Healthy growth in the core fee income: Bank has posted strong 17% growth in core fee income to Rs 68 crore. However, the recoveries and other income declined 32% to Rs 22 crore and treasury income declined 16% to Rs 30 crore, causing 5% dip in the overall non-interest income to Rs 119.82 crore in the quarter ended March 2018.
Expenses ratio improves: The other expenses of the bank rose 3% to Rs 193.49 crore, as other expenses moved up 5% to Rs 116.73 crore, while employee expenses fell 1% to Rs 76.76 crore in Q4FY2018. Cost to income ratio improved to 39.7% in Q4FY2018 compared with 43.3% in Q4FY2017, helping the Operating Profit to increase 19% to Rs 294.27 crore.
Provisions and contingencies rises: The bank has showed 21% increase in provisions to Rs 86.15 crore.
Effective tax rate was flat at 26.9% in Q4FY2018 same as in Q4FY2017. Net Profit increased 18% YoY to Rs 152.13 crore during quarter ended March 2018.
Annual Financial Performance:
Bank has posted 18% increase in net profit to Rs 592.00 crore in the year ended March 2018. The net interest income increased 19% to Rs 1430.30 crore, while non-interest income moved up 10% to Rs 532.10 crore, pushing up net total income by 17% to Rs 1962.40 crore in FY2018. The operating expenses increased 10% to Rs 754.65 crore, while provision and contingencies galloped 39% to Rs 417.75 crore, allowing profit before tax to increase 14% to Rs 790.00 crore in FY2018. The cost-to-income ratio improved to 38.5% in FY2018 compared to 40.9% in FY2017. An effective tax rate declined to 25.1% in FY2018 compared to 27.4% in FY2017. The net profit has increased 18% to Rs 592.00 crore in FY2018.
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