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Informist, Monday, Jul. 27, 2026

By Divya Moolayattil

MUMBAI – City Union Bank Ltd. is likely to post a double-digit on-year rise in net profit for the June quarter due to strong loan growth and improved asset quality, according to brokerages. However, the growth in net profit is likely to moderate sequentially. 

The bank is expected to post a net profit of INR 3.72 billion for the June quarter, according to the average of estimates from nine brokerages. This is about 22% higher from the year-ago quarter and up 3% from the previous quarter. The highest estimate for the bank's net profit is INR 4.90 billion by Elara Securities (India) Pvt. Ltd., while the lowest estimate of INR 3.16 billion is Prabhudas Lilladher Pvt. Ltd.

The lender is also likely to post a sequential increase in net interest income for the June quarter due to healthy growth in advances. The bank's net interest income growth is estimated to be in line with average loan growth in the quarter as a rise in yield on advances is likely to be in tandem with the rise in cost of deposits, according to YES Securities (India) Ltd.

While the bank's June quarter net interest income is expected to grow 3.6% on quarter, its advances are estimated to rise 1.5-3.5% on quarter, according to brokerages. The industry average for loan growth is expected to be 17% on year for the June quarter, while City Union's advances are estimated to have grown around 23-26%, according to brokerages.

The bank is expected to post a net interest income of INR 8.14 billion for the June quarter, according to the average of estimates. This is 3.6% higher on quarter and over 30% higher on year. The highest estimate for City Union's net interest income is of INR 9.2 billion by Elara Securities, while the lowest estimate of INR 7.8 billion is by Dolat Capital Market Pvt. Ltd.

City Union Bank Ltd.'s net advances are estimated to grow around 23-26% on year to INR 665 billion-INR 681 billion as of Jun. 30. Its total deposits are likely to be up 20-22% on year at INR 660 billion-INR 790 billion as of Jun. 30.

Higher loan growth was likely driven by micro, small, and medium enterprise loans and gold loans, while the improving cost-efficiency likely supported pre-provision profit for the reporting quarter.  

The credit cost of the bank is expected to be around 0.5% for the June quarter, down nearly 8 bps on year and around 28 bps on quarter, according to estimates by two brokerages. However, JM Financial estimates credit cost to be higher at 0.8% for the June quarter. "Fresh slippages should also remain low for the bank around 2% of total loans or INR 2.5 billion," Kotak Securities said in its report. Slippage refers to loans that have turned non-performing assets for the bank in a given duration. The bank's gross non-performing assets ratio is expected to be 1.81%, down 118 basis points on year and 10 bps on quarter, according to Prabhudas Lilladher Capital Ltd. 

At 0945 IST, shares of the bank were at INR 225.33 apiece on the National Stock Exchange, up nearly 2.54%. The stock is up over 11% since the company reported its March quarter earnings. City Union Bank will detail its June quarter earnings on Tuesday.

Of the 14 research reports on City Union Bank available with Informist, 13 have a "buy" recommendation on the stock while one has a "hold" call. The average target price of the "buy" recommendations is INR 242, over 7.5% higher than the current market price.

Following are the June quarter earnings estimates for City Union Bank from nine brokerages in descending order of the estimate of net profit in INR billion:

End

Edited by Deepshikha Bhardwaj

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