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City Union Bank Posts 10.73% Growth in Profits and Maintains Gross NPA at 2.62%: Result Analysis


City Union Bank has given some hope, among the NPA ridden banking sector. Q1 results were descent with income going up by 8.92% and net profit by 10.73% QoQ.City Union Bank Logo
The other important thing to note is, NPA’s have been much more contained and gross NPA is still below the 3% mark, which is the current trend for non banking financial institutions (which are considered to be performing better then the scheduled commercial banks).
Capital adequacy ratio is currently at 15.25%, indicating there is sufficient buffer to absorb future NPA’s.

  • Operating margin increased from 24.31 in Q1FY16 to 26.69 in reported quarter, mainly due to high net interest margin of 4.07%.
  • Deposits growth was at 11% and advances grew by 19% QoQ.
  • Provisioning of bad loans has remained almost at same level of 70 Crs for reported quarter and previous quarter. (which actually should have decreased if most of provisioning was done in March quarter of 2016).
  • 25.14% of PBT has been paid as taxes for the reported quarter, where as  for the same quarter last year 26.63% of PBT has been paid as taxes.
  • Gross NPA and net NPA have increased by 8.41% and 3.35% respectively compared to previous quarter, its mainly because of more loans slipping into NPA and no growth in terms of advances. However Gross NPA and net NPA are still at a comfortable level of 2.62% and 1.59% respectively.
  • Capital adequacy ratio is way more than RBI prescribed 9% and currently stands at 15.25%.

City union Bank Q1FY17 Result
The bank with its good result, hit a 52 week high of Rs 136.50 intermittently and closed at Rs 130.75
City Union Bank Q1FY17 Share Price Movement



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Disclosure: The authors at Capital Mind have positions in the market and some of them may support or contradict the material given above, or may involve a direction derived from independent analysis.


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