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City Union Bank has reported 15% growth in net profit at Rs 175.11 crore for the quarter ended March 2019. The bank has posted healthy 14% growth in net interest income (NII), while the core fee income of the bank also improved 14% in Q4FY2019. The Net Interest Margin (NIM) of the bank improved to 4.40% in Q4FY2019 compared to 4.36% in the corresponding quarter of previous year.
On business front, the bank as has posted 17% growth in business with strong 17% surge in loan book. The asset quality of the bank was stable in Q4FY2019. Bank has maintained healthy credit to deposit ratio of 86.0% at end March 2019. Further, the bank has posted strong increase in CASA ratio to 25.2% at end March 2019 from 23.9% end December 2018 and 24.2% at end March 2018.
Stable asset quality: The bank has maintained stable asset quality in Q4FY2019.
- The fresh slippages of loans stood at Rs 204.4 crore in Q4FY2019, while the recovery, upgradations and write-off together were higher at Rs 119.2 crore.
- The restructured advances book stood at mere Rs 49.7 crore at end March 2019.
- The stressed assets (NNPA and Standard restructured asset) of the bank stood at 1.94% of advances at end March 2019.
| Asset Quality Indicators: City Union Bank |
|
201903 |
201812 |
201809 |
201806 |
201803 |
Variation |
| QoQ |
YoY |
| Gross NPA (Rs Crore) |
977.05 |
891.92 |
847.88 |
851.12 |
856.55 |
10 |
14 |
| Net NPA (Rs Crore) |
591.46 |
527.60 |
497.78 |
473.49 |
474.78 |
12 |
25 |
| % Gross NPA |
2.95 |
2.91 |
2.85 |
3.02 |
3.03 |
4 |
-8 |
| % Net NPA |
1.81 |
1.74 |
1.69 |
1.70 |
1.70 |
7 |
11 |
| % Provision Coverage Ratio |
63.00 |
65.00 |
65.00 |
65.00 |
64.00 |
-200 |
-100 |
| % CRAR - Basel III |
15.55 |
14.79 |
15.11 |
16.06 |
16.22 |
76 |
-67 |
| Tier I - Basel III % |
15.03 |
14.39 |
14.71 |
15.64 |
15.79 |
64 |
-76 |
| Variation in basis points for figures given in percentages and in % for figures in Rs crore |
Business Highlights:
Healthy business growth: The business of the bank has increased 17% YoY to Rs 71513 crore end March 2019, driven by 17% surge in advances to Rs 33065 crore. Deposits also increased 17% to Rs 38448 crore at end March 2019.
CASA deposits ratio improves: The CASA deposits of the bank surged 22% YoY to Rs 9698 crore at end March 2019. The CASA ratio improved to 25.2% at end March 2019 compared to 24.2% at end March 2018.
Strong loan growth: Advances growth was driven by retail loans rising 15% YoY to Rs 3777 crore at end March 2019, while credit to large industries also increased 17% to Rs 2219 crore and wholesale traders 12% to Rs 4588 crore and MSME 7% to Rs 10281 crore at end March 2019. The credit to agriculture moved up 19% YoY to Rs 4879 crore at end March 2019.
The share of secured loans increased to 99.2% at end March 2019 from 98.8% at end March 2018. The share of retail, agriculture and MSME loans also declined to 57.3% at end March 2019 from 60.0% a year ago.
Investment book of the bank declined 2% YoY to Rs 7863.3 crore at end March 2019. The AFS book dipped 24% to Rs 1540 crore, while HTM book rose 5% to Rs 6324 crore at end March 2019. The AFS book duration stood at 0.98 years with the overall investment portfolio duration at 4.04 years at end March 2019.
Margins improve: The bank has showed sharp 1 bps YoY rise in cost of funds to 5.24%, while yield on fund moved up 9 bps YoY to 9.15% in Q4FY2019. Thus, the NIM has improved 4 bps YoY to 4.40% in Q4FY2019.
Branch expansion: The bank has added 34 branches, 29 ATMs and 75 staff in Q4FY2019, taking overall tally to 650 branches and 1685 ATM's and 5518 employees end March 2019.
Book value of the bank stood at Rs 65.9 per share at end March 2019, while the adjusted book value (net of NNPA and 10% of restructured advances) was Rs 57.8 per share at end March 2019.
Quarterly Performance
NII rises as NIM improves: Bank has recorded 13% increase in the interest earned at Rs 984.55 crore, while interest expenses declined 12% to Rs 563.95 crore in Q4FY2019. NII improved 14% to Rs 420.60 crore in the quarter ended March 2019.
Healthy growth in the core fee income: Bank has posted strong 14% growth in core fee income to Rs 78 crore, while the recoveries and other income jumped 101% to Rs 44 crore. However, the treasury income declined 15% to Rs 26 crore. The overall non-interest income increased 23% to Rs 146.89 crore in the quarter ended March 2019.
Stable expenses ratio marginally rises: The operating expenses of the bank increased 19% to Rs 229.72 crore, as other expenses moved up 18% to Rs 138.32 crore, while employee expenses increased 19% to Rs 91.4 crore in Q4FY2019. Cost to income ratio rose to 40.5% in Q4FY2019 compared with 39.7% in Q4FY2018. The Operating Profit increased 15% to Rs 337.77 crore.
Provisions and contingencies marginally up: The bank has showed 5% rise in provisions to Rs 90.67 crore. The NPA provisions stood at Rs 81 crore and standard assets at Rs 15.3 crore, while the bank has written back restructured advance provisions of Rs 5.6 crore in Q4FY2019.
Effective tax rate increased to 29.1% in Q4FY2019 from 26.9% in Q4FY2018. Net Profit increased 15% YoY to Rs 175.11 crore during quarter ended March 2019.
Annual Financial Performance:
Bank has posted 15% increase in net profit to Rs 682.85 crore in the year ended March 2019. The net interest income increased 13% to Rs 1611.49 crore, while non-interest income declined 3% to Rs 514.39 crore. The net total income moved up 8% to Rs 2125.88 crore in FY2019. The cost-to-income ratio increased to 41.7% in FY2019 compared to 38.5% in FY2018. The operating expenses increased 17% to Rs 885.89 crore, while provision and contingencies declined 25% to Rs 315.14 crore, allowing profit before tax to increase 17% to Rs 924.85 crore in FY2019. An effective tax rate rose to 26.2% in FY2019 compared to 25.1% in FY2018. The net profit has increased 15% to Rs 682.85 crore in FY2019.
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