City Union Bank has registered a healthy quarterly result on all fronts with strong beat on profitability at 1.7bn driven by healthy NIMs, higher non-interest income and lower provisions. In 3QFY21, the bank has made Covid provision of 1.25bn translating in the total contingent buffer of 4.7bn (~1.3% of loan book), which we believe is reasonable. In 3QFY21, the pro-forma NNPA stood 3.4%, while restructuring book stood at 8.1bn (~2.2% of loan book). The management expects the restructuring book to be at ~5% in 4QFY21. Factoring the management guidance for slippages (~3.5% in FY21) and cost to income ratio (~43% in FY21), we estimate a ROA of ~1.1% in FY21. Furthermore, we estimate ROA improvement gradually to ~1.5% by FY23E. We recommend...