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Informist, Friday, Jul 26, 2024

--City Union Bank: To raise up to 5 bln rupees via QIP 
--City Union Bank provision coverage ratio 73% as on Jun 30 
--Apr-Jun provisions 390 mln rupees vs 1.52 bln 
--City Union Bank Basel III capital adequacy ratio 23.58% as on Jun 30 
--Net NPA ratio 1.87% as on Jun 30 vs 1.97% qtr ago 
--Apr-Jun total income 15.81 bln rupees vs 14.58 bln 
--City Union Bank gross NPA ratio 3.88% as on Jun 30 vs 3.99% qtr ago 
--City Union Bank Apr-Jun net profit 2.64 bln rupees vs 2.27 bln 
--City Union Bank Apr-Jun net profit 2.64 bln rupees 
--Analysts saw City Union Bank Apr-Jun net profit 2.47 bln rupees 
 

By Nishat Anjum and Sourabh Kumar

MUMBAI – Beating market estimates, City Union Bank Ltd's net profit rose 16.4% on year to 2.6 bln rupees for the quarter ended Jun 30 on account of a sharp fall in provisions. Sequentially, the bank's bottomline rose 3.80%. The market had expected the bank's net profit to fall to 2.47 bln rupees. 

Provisions made by the bank fell 74.34% on year to 390 mln rupees for the reporting quarter. On a sequential basis, however, provisions rose 21.88% from 320 mln rupees. As of Jun 30, the bank's provision coverage ratio stood at 73%.

For the private bank, total income saw a rise of 8.5% on year to 15.81 bln rupees. Of this, interest earned rose 9.7% on year to 13.89 bln rupees, while it was largely unchanged on a quarterly basis, marking only a 1% rise. On the expenses front, the bank reported a rise of 15.7% on an annualised basis to 12.07 bln rupees. Within this, operating expenses rose 21.4% to 3.64 bln rupees, which weighed on the bank's bottomline.

The asset quality of the lender improved in this quarter, with the gross non-performing assets ratio at 3.88% as of Jun 30, against 4.91% a year ago, and 3.99% a quarter ago. Similarly, the net NPA ratio was 1.87% as of Jun 30, down from 2.51% a year ago and 1.97% a quarter ago.

The bank's deposits were at 548.57 bln rupees as of Jun 30, lower than 556.57 bln rupees a quarter ago. However, deposits rose 6% on an annualised basis. The low-cost current account savings account deposits were at 161.95 bln rupees, rising a mere 2% on-year. The current account, savings account ratio stood at 30% at the end of the reporting quarter. Amid expenses, the cost of deposits for the lender was 5.72% in Apr-Jun, higher than 5.36% a year ago.

In their pre-earnings reports, brokerage firms had expected poor loan growth for the bank on a quarterly basis. The lender reported that advances as of Jun 30 were at 465.48 bln rupees, slightly higher than 464.82 bln rupees as of Mar 31.

The bank earned a net interest income of 5.45 bln for Apr-Jun, as against 5.23 bln rupees in the corresponding quarter a year ago. Net interest margin was 3.54% in the quarter under review, shrinking from 3.67% a year ago.

In a separate exchange notice today, the bank said that it will raise up to 5 bln rupees through qualified institutional placement.

As of Jun 30, the Basel III capital adequacy ratio was at 23.58%. The bank released its earnings post market hours. Today, shares of the private lender closed 0.5% higher at 159.81 rupees on the National Stock Exchange.  End

Edited by Taniam Banerjee

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