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City Union Bank has reported 15% growth in net profit at Rs 178.11 crore for the quarter ended December 2018. The bank has posted healthy 15% growth in net interest income (NII), while the core fee income of the bank also improved 16% in Q3FY2019. The Net Interest Margin (NIM) of the bank improved to 4.41% in Q3FY2019 compared to 4.32% in the previous quarter.
On business front, the bank as has posted 15% growth in business with strong 17% surge in loan book. The asset quality of the bank was stable in Q3FY2019. Bank has substantially improved the credit to deposit ratio to 86.3% at end December 2018 from 83.2% at end December 2017. The CASA ratio of the bank has improved to 23.9% at end December 2018 from 22.3% at end December 2017.
Asset quality stable: The bank has maintained stable asset quality in Q3FY2019.
- The fresh slippages of loans stood at Rs 165.7 crore in Q3FY2019, while the recovery, upgradations and write-off together were higher at Rs 121.7 crore.
- The restructured advances book of the bank has dipped to nil at end December 2018.
- The provision coverage ratio of the bank was healthy at 65% end December 2018.
| Asset Quality Indicators: City Union Bank |
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201809 |
201806 |
201803 |
201712 |
201709 |
Variation |
| QoQ |
YTD |
YoY |
| Gross NPA (Rs Crore) |
847.88 |
851.12 |
856.55 |
859.79 |
780.39 |
0 |
-1 |
9 |
| Net NPA (Rs Crore) |
497.78 |
473.49 |
474.78 |
447.82 |
440.98 |
5 |
5 |
13 |
| % Gross NPA |
2.85 |
3.02 |
3.03 |
3.30 |
3.07 |
-17 |
-18 |
-22 |
| % Net NPA |
1.69 |
1.70 |
1.70 |
1.74 |
1.76 |
-1 |
-1 |
-7 |
| % Provision Coverage Ratio |
65.00 |
65.00 |
64.00 |
65.00 |
63.00 |
0 |
100 |
200 |
| % CRAR - Basel III |
15.11 |
16.06 |
16.22 |
14.93 |
15.31 |
-95 |
-111 |
-20 |
| Tier I - Basel III % |
14.71 |
15.64 |
15.79 |
14.47 |
14.86 |
-93 |
-108 |
-15 |
| Variation in basis points for figures given in percentages and in % for figures in Rs crore |
Business Highlights:
Strong business growth: The business of the bank has increased 15% YoY to Rs 66141 crore end December 2018, driven by 17% surge in advances to Rs 30637 crore. Deposits rose 13% to Rs 35504 crore at end December 2018.
CASA deposits ratio improves: The CASA deposits of the bank declined 21% YoY to Rs 8470 crore at end December 2018. The CASA ratio rose to 23.9% at end December 2018 compared to 22.3% at end December 2017.
Strong loan growth: Advances growth was driven by retail loans rising 27% YoY to Rs 3817 crore at end December 2018, while credit to large industries also increased 8% to Rs 2018 crore and wholesale traders 13% to Rs 4173 crore and MSME 14% to Rs 10325 crore at end December 2018. The credit to agriculture jumped 27% YoY to Rs 4515 crore at end December 2018.
The share of secured loans improved to 99.2% at end December 2018 from 98.8% at end December 2017. The share of retail, agriculture and MSME loans also improved to 60.9% at end December 2018 from 59.8% a year ago.
Investment book of the bank rose 2% YoY to Rs 7809.8 crore at end December 2018. The AFS book jumped 21% to Rs 1839 crore, while HTM book declined 2% to Rs 5970 crore at end December 2018. The AFS book duration stood at 0.55 years with the overall investment portfolio duration at 3.98 years at end December 2018.
Margins improve: The bank has showed 13 bps YoY decline in cost of funds to 5.18%, while yield on fund declined only 6 bps YoY to 9.13% in Q3FY2019. The NIM was stable YoY at 4.41% in Q3FY2019, while improved over 4.32% in Q2FY2019.
Branch expansion: The bank has added 9 branches, 21 ATMs and 37 staff in Q3FY2019, taking overall tally to 616 branches and 1656 ATM's and 5443 employees end December 2018.
Book value of the bank stood at Rs 63.5 per share at end December 2018, while the adjusted book value (net of NNPA) was Rs 56.3 per share at end December 2018.
Quarterly Performance
NII rises as NIM improves: Bank has recorded 12% increase in the interest earned at Rs 966.62 crore, while interest expenses rose 10% to Rs 548.53 crore in Q3FY2019. NII improved 15% to Rs 418.09 crore in the quarter ended December 2018.
Healthy growth in the core fee income: Bank has posted strong 16% growth in core fee income to Rs 71 crore, while the recoveries and other income rose 7% to Rs 28 crore. However, the treasury income declined 40% to Rs 21 crore, causing 2% dip in the overall non-interest income to Rs 119.83 crore in the quarter ended December 2018.
Expenses ratio rises: The operating expenses of the bank increased 21% to Rs 231.06 crore, as other expenses moved up 25% to Rs 138.32 crore, while employee expenses increased 16% to Rs 92.74 crore in Q3FY2019.
Cost to income ratio was nearly stable at 43.0% in Q3FY2019 compared with 39.1% in Q3FY2018, helping the Operating Profit to increase 4% to Rs 306.86 crore.
Provisions and contingencies decline: The bank has showed 8% decline in provisions to Rs 78.75 crore.
Effective tax rate declined to 21.9% in Q3FY2019 from 26.6% in Q3FY2018. Net Profit rose by 15% YoY to Rs 178.11 crore during quarter ended December 2018.
YTD Financial Performance:
Bank has posted 15% increase in net profit to Rs 507.74 crore in the nine-months ended December 2018. The net interest income increased 12% to Rs 1190.88 crore, while non-interest income declined 11% to Rs 367.50 crore, pushing up net total income by 6% to Rs 1558.38 crore in 9MFY2019. The operating expenses increased 17% to Rs 656.17 crore, while provision and contingencies dipped 32% to Rs 224.47 crore, allowing profit before tax to increase 16% to Rs 677.74 crore in 9MFY2019. The cost-to-income ratio increased to 42.1% in 9MFY2019 compared to 38.1% in 9MFY2018. An effective tax rate rose to 25.1% in 9MFY2019 compared to 24.4% in 9MFY2018. The net profit has increased 15% to Rs 507.74 crore in 9MFY2019.
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