Earnings Review
Interest, other income help City Union Bank PAT beat view
This story was originally published at 18:49 IST on 2 May 2025
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--City Union Bank Jan-Mar net profit INR 2.88 bln vs INR 2.55 bln year ago
--Analysts saw City Union Bank Jan-Mar net profit INR 2.82 bln
--City Union Bank Jan-Mar total income INR 17.84 bln vs INR 15.49 bln yr ago
--City Union Bank gross NPA ratio 3.09% as on Mar 31 vs 3.36% quarter ago
--City Union Bank Jan-Mar provisions INR 780 mln vs INR 320 mln year ago
--City Union Bank net NPA ratio 1.25% as on Mar 31 vs 1.42% quarter ago
--City Union Bank Basel-III capital adequacy ratio 23.75% as on Mar 31
--City Union Bank to pay INR 2 per share dividend
--City Union Bank FY25 net profit INR 11.24 bln vs INR 10.16 bln year ago
--City Union Bank FY25 total income INR 67.32 bln vs INR 60.12 bln year ago
--City Union Bank provision coverage ratio at 78% as on Mar 31
--City Union Bank advances INR 531 bln as on Mar 31, up 14% on year
--City Union Bank deposits INR 635 bln as on Mar 31, up 14% on year
--City Union Bk Jan-Mar net interest income INR 6 bln, up 10% on year
--City Union Bk Jan-Mar net interest margin 3.60% vs 3.58% quarter ago
--City Union Bank Jan-Mar cost of funds 4.95% vs 4.88% quarter ago
By Kabir Sharma
MUMBAI – A rise in interest income and other income helped City Union Bank report higher net profit for the March quarter than projected by analysts. However, a surge in provisions limited the growth in the Tamil Nadu-based bank's bottom line.
The bank's net profit for Jan-Mar rose 13% on year to INR 2.88 billion, against the average of estimates by 13 brokerages of INR 2.82 billion. The bank also announced a dividend of INR 2 per share. Shares of City Union Bank closed at INR 173.48, down 1.7%, on the National Stock Exchange. The bank released its results after market hours.
The bank's interest income for the March quarter rose 11.5% to INR 15.30 billion. The other income, which includes recoveries, rose 43.0% to INR 2.51 billion, up from INR 1.75 billion a year ago and INR 2.28 billion in Oct-Dec.
The rise in the lender's bottom line was limited by a surge in provisions for Jan-Mar, which rose to INR 780.00 million, more than doubling from INR 320.00 million a year ago.
For the financial year ended Mar. 31, the bank reported a net profit of INR 11.24 billion against INR 10.16 billion in the previous year and a total income of INR 67.32 billion, against INR 60.12 billion. The bank's deposits rose 14% to INR 635.00 billion as of Mar. 31. Within deposits, low-cost current account and savings account deposits rose 6% to INR 181.20 billion.
Advances also registered a growth of 14% to INR 531.00 billion. The bank's total business grew 14% to INR 1.17 trillion as of Mar. 31. "The main focus of the bank is lending to micro, small, and medium enterprises, retail, wholesale trade with a granular asset profile including providing short-term and long-term loans to the agricultural sector," the bank said in its investor presentation.
The net interest income for the March quarter, the bank's core income, rose 10.0% on year to INR 6.00 billion. The net interest margin was 3.60% in Jan-Mar.
The bank's cost-to-income ratio improved to 48.21% in March from 51.26% a year ago. The cost of funds for the bank inched up in the March quarter to 4.95%, from 4.88% in the December quarter.
The bank's gross non-performing asset ratio improved to 3.09% as of Mar. 31, from 3.36% a quarter ago. The net non-performing asset ratio also improved to 1.25%, from 1.42% at the end of the December quarter. City Union Bank's provision coverage ratio was 78.0% as of Mar. 31. The capital adequacy ratio was 23.75% as of Mar. 31. End
Edited by Rajeev Pai
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