The 23 reports from 8 analysts offering long term price targets
for City Union Bank Ltd. have an average target of 216.75. The consensus estimate
represents an upside of 0.23%
from the last price of 216.25.
Sector: Banks /Small-Cap | Earnings Update 4QFY19 Background: City Union Bank (CUB) among the smaller-sized banks in the private sector space operates a network of 616 branches. With about 2/3rds of its branches located in Tamil Nadu the bank's business is largely skewed towards the Southern India. Majority of its business comes from branches located in South India. CUB has a significant chunk of its branches in urban and semi-urban areas. With no identifiable promoters CUB is run by a team of professionals. A slew of FII's hold a 24.4% equity stake....
Net Interest Margin (NIM) remained almost stable on a sequential basis, where as increased by 4bps on a YoY basis to 4.40%. The banks deposits have grown by 17% YoY, with 22% increase in CASA deposits (CA 15%, SA 25%) and the CASA mix at 25.22%. A marginal slippage in gross/net NPA by 4bps/7bps and currently stands at 2.95%/1.81% and PCR almost stable at around 63%. We expect NII/PAT to grow at a CAGR of 14%/16% over FY19-21E on the back of 17% CAGR growth in loans and advances....
City Union Bank (CUBL) reported 4QFY19 results with the key strategic pointers being: (1) NIM remained stable, declining 1 bp QoQ to a still industry-leading 4.40%, continuing to belie management's continued conservativeness with regard to NIM guidance (2) Underlying asset quality remains well under control and management guided for a slippage ratio of 1.75-2% for FY20 (3) Overall loan growth was 17% YoY and management guided for 18-20% growth for FY20, which is adequate for CUBL. (See comprehensive conference call takeaways on page 2 for significant incremental colour;). Per se, on the key P&L; items, CUBL posted NII growth of 14% YoY at Rs4,206mn, PPOP growth of 15% YoY at Rs3,378mn and PAT growth of 15% YoY at Rs1,751mn....
Stable return ratios to sustain premium valuation... The bank's conservative approach kept asset quality largely stable though slippages were a bit higher at | 204 crore, leading to a ~4 bps QoQ increase in GNPA ratio to 2.95%. The management reiterated slippage will remain...
Strong regional focus and customer franchise in core segments (MSME/traders) have enabled CUBK to consistently outperform its regional peers (KVB and FB). While critics may be wary of its regional concentration, we believe there is enough headroom to grow in TN (3.6% marketshare). Waning competition will only help. A low frills operating model (that earns employee loyalty via ESOPs) and calibrated credit filters contribute to steady RoAA. CUBK looks relatively small, but is rock solid. With consistent performance and healthy core parameters, CUBK deserves premium multiples. Barring the marginal blip in asset quality, 4QFY19 was mostly along expected lines. Maintain BUY with a TP of Rs 240 (3x Mar-21E ABV of Rs 80)
Net interest income grew by 15% and PAT grew by 15% YoY in Q3FY19 mainly led by consistent 17% YoY growth in loan book. Net Interest Margin (NIM) remained stable at 4.41% on a YoY basis and improved sequentially by 9 bps against 4.32% in Q2FY19 due to sequential increase in yield of funds and cost of funds. Deposit grew by 13% YoY in Q3FY19 in which CASA grew by 21% YoY. Asset quality improved with GNPA at 2.91% against 3.30% in Q3FY18, with NNPA and PCR stable at 1.74% and 65% respectively....
NII witnessed a continued pick-up in growth trajectory at 14.5% YoY to | 418 crore, in line with our estimate, led by healthy credit offtake Other income was at | 120 crore; down 1.5% YoY, lower than our estimate, attributable to a subdued treasury performance. Accordingly, operating profit was muted at | 307 crore, up 3.5% YoY Provisions were at | 79 crore, down 8.1% YoY & 16% QoQ. Lowerthan-expected tax outgo at | 50 crore, led earnings growth at 15.1% YoY to | 178.1 crore, broadly in line with our estimate Slippage remained higher at ~| 165 crore, led by one large...
City Union Bank (CUBL) reported 3QFY19 results with the key strategic pointers being: (1) NIM expanded 9 bps QoQ to 4.41% which belies management's continued conservativeness with regard to NIM guidance (2) Underlying asset quality remains well under control despite the slippage of a paper sector account worth Rs 850mn (3) Overall loan growth of 17% and management re-iterated prior guidance of 18-20% for FY19, which is adequate. (See comprehensive conference call takeaways on page 2 for significant incremental colour;). Per se, on the key P&L; items, CUBL posted NII growth of 15% YoY at Rs4,181mn, PPOP growth of 4% YoY at Rs3,069mn and PAT growth of 15% YoY at Rs1,781mn. We have revised our estimates for...
We assign a target multiple of 3xDec-20E ABV to arrive at a TP of Rs 236. Maintain BUY. Yet again, CUBK performed consistently, across parameters. Loan growth was steady and broad based at 17%, fees grew ~16%, NIMs improved ~10bps sequentially, CASA (24%) and the PCR (65%) remained stable.
We believe, CUB with superior NIM, best return profile, grip on asset quality with greater bottom-line visibility over the medium term should continue to fetch higher multiple. Initiate BUY with a Target Price of Rs 228/sh (2.9x FY21E ABV ).
Net interest income grew by 12% and PAT grew by 16% YoY in Q2FY19 mainly led by consistent 17% YoY growth in loan book. NIM contracted 14bps to 4.32% against 4.46% in Q2FY18 due to 25bps decline in yield on funds against 21bps improvement in cost of funds YoY. Deposit grew by 12% YoY in Q2FY19 in which CASA grew by 15%....
NII increased 12.2% YoY to | 398 crore, in line with our estimate, led by healthy credit offtake. Margins came in at 4.32%, ~8 bps higher QoQ but remained 14 bps lower on a YoY basis Other income came in at | 119 crore; down 23.6% YoY, due to a subdued treasury performance. Accordingly, operating profit came in muted at | 296 crore, down 7.5% YoY Provisions were at | 68 crore, lowest in last eight quarters. This allowed PAT to come in line with estimate (| 168 crore, up 16% YoY)...
Maintain BUY with a revised TP of Rs 227 (3.0x Sept-20E ABV of Rs 75.5). CUBKs 2Q performance was in line with our estimates and was consistent across parameters sequentially. Growth was steady and broad based at 17% with a tilt towards the trader segment. Surprisingly, NIMs inched up 8bps QoQ with a drop in CoD. The QoQ dip in fees, after it rose sharply for 2 qtrs was expected.
We retain Hold on CUBK with TP at Rs160 (valued at 2.2x FY20E ABV). Q2'19 revenue beat estimates on strong margin performance; PAT though was as per expectations. Loan growth remains healthy (consecutive fourth quarter of 17%+ YoY growth); asset quality intact with coverage (incl. tech w/off) healthy at 65%; capital position remains strong (CAR / Tier-I at 15.1% / 14.7% respectively). We like CUBK for its...
Net interest income grew by 9.5% and PAT grew by 15% YoY in Q1FY19 mainly led by 17% YoY growth in loan book. NIM contracted by 23bps to 4.24% in Q1FY19 against 4.47% in Q1FY18 due to 93 bps decline in yield on advances. Deposit grew by 10% YoY in Q1FY19 in which CASA grew by 13%....
