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.

City Union Bank (CUB) Q2FY19 results were broadly in line with our estimates with marginal improvement in asset quality.

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%....

NII increased to Rs. 374.77 Cr in Q1FY19 compared to Rs. 367.94 Cr in Q4FY18. City Union Bank Ltd Q1FY19 results Comment

Maintain BUY with a TP of Rs 210 (3x Mar-20E ABV of Rs 70). CUBKs 1Q show mirrored its stable performance through FY18 as advances grew ~17% YoY and fee traction sustained (up 12% sequentially). While margins were down 12bps QoQ (4.24%) the dip was on expected lines. Though CUBK continues to prudently provide (~Rs 80mn) on O/S SRs, overall provisions were down ~10% sequentially. Sustained SA traction (+2% QoQ after a 10% sequential jump in 4Q) was an added positive.

City Union Bank's NII increased 9.4% YoY to | 374.7 crore, lowest in the last few quarters. Previously, the trend was ~18% YoY growth in NII. This was largely owing to moderation in margins to 4.24% in Q1FY19, which in recent quarters was high at ~4.4%...

City Union Bank had announced a bonus issue in the ratio of 1:10. The exdate for the same is today i.e. July 10, 2018. Accordingly, the number of shares of the bank has increased from 66.5 crore to 73.5 crore. Thus, the share price has adjusted to | 174/share from yesterday's close of | 187/share. Hence, our earlier target price got revised to | 182/share from | 200/share earlier, post this corporate action. However, factoring in the bank's strong earnings trajectory even in this environment, we retain our positive stance on the bank and upgrade the target price to | 200 valuing at 2.6x revised ABV and maintain BUY rating....

PAT grew by 18%, supported by 17% YoY growth in loan book. NIM increased by 16bps to 4.36% in Q4FY18 against 4.20% in Q4FY17. Deposit grew by 9% YoY in Q4FY18....

Sector: Banks /Small-Cap | Earnings Update 4QFY18 Background: City Union Bank (CUB) among the smaller-sized banks in the private sector space operates a network of 600 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...

City Union Bank (CUB) Q4FY18 results were broadly in line with our estimates with marginal improvement in asset quality.

NII came in line with estimate at | 368 crore (up 18.5% YoY). However, lower-than-expected operating expenses led to higher operating earnings of | 294 crore (I-direct estimate at | 285 crore) With asset quality under control, provisions were at ~| 86 crore,...

Best-in-class return ratios underpin our persistent BUY, with a TP of 231 (3x Mar-20E ABV of ~Rs 77). CUBK ended 4Q with yet another stable show. Decent loan growth (+17% YoY), a laudable control on opex (up merely 3% YoY, despite adding 50 branches in FY18) led to robust (+19% YoY) PPOP growth. Provisions were stable sequentially even though CUBK continued to prudently provide on O/S SRs. NIMs remained sticky yet again (4.36%, down only 5bps QoQ), despite mgt pessimism

Our revised TP is Rs 231 (3x FY20E ABV of Rs 77). Our recent interaction with the City Union Bank (CUBK) reaffirms our consistently bullish view. CUBK has repeatedly quashed apprehensions around growth (23% loan CAGR over FY06-17) and delivered stable asset quality across cycles. Its relatively weaker liability franchise is more than compensated by a flourishing asset profile. We believe CUBKs balance of deep customer relationships, employee motivation and rock steady astute top management will propel the bank to greater heights.

City Union Bank (CUB) Q3FY18 financial results was broadly in-line with our estimates. Net interest income grew 19% YoY to INR 365cr on back of 20% YoY growth in loan & advances and marginal...

City Union Bank Ltd Q3FY18 results comment NII rose to Rs. 365.13 Cr in Q3FY18 compared to Rs. 354.86 Cr in Q2FY18.