City Union Bank (CUB) is one the fastest growing small-sized bank with a rare status of being one of the most consistent bank in terms of growth and operating metrics

NII growth was healthy at 15.5% YoY, 8.7% QoQ to | 475 crore, mainly driven by margin expansion. NIMs jumped 21 bps YoY, 14 bps QoQ to 4.12%, led by a reduction in cost of funds and optimisation of credit deposit ratio. As a prudent measure, the bank had reversed interest on exposure of | 25 crore classified as SMA. Other income fell 13.2% YoY to | 169 crore, on account of YoY decline in treasury and fee income. Opex was flattish on a yearly basis while there was 7.6% rise QoQ and provisions remained elevated, up 12.7% QoQ, 64% YoY to | 177 crore. As a result, PAT showed...

Background: City Union Bank (CUB) among the smaller-sized banks in the private sector space operates a network of 700 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...

City Union Bank Ltd (CUB), the oldest private sector bank in India, is a mid-sized commercial bank headquartered in Tamil Nadu, having a network of 700 branches and 1,780 ATMs spread across the country and a loan book size of Rs.35,437cr Total Business grew by 4% YoY with advances growing at 6% supported by strong growth in ECLGS (Emergency Credit Line Guarantee Scheme) and Gold Loan....

Motilal Oswal Financial Services: Strong growth in derivative ADTVs (39.5% QoQ) bolstered capital markets APAT 52.1/53.1% YoY/QoQ. An improvement of 0.3/9.7% YoY/QoQ in QAAUM meant that AMC's APAT recovered 20.9% QoQ. Management continues to increase provisioning (+52.0% QoQ), resulting in a 30.7% QoQ decline in MOHL's PBT. Significant MTM gain (Rs 1.73bn, +249.1% YoY) on treasury resulted in MOFS (ex. MOHFL) APAT growth of 74.3% YoY. We have increased our FY21E APAT estimate by 23.9% to factor in the higher treasury and broking profits, while mildly changing FY22/23E. We retain an ADD with a lower TP of Rs 700 (15/25x Broking/AMC, + 0.7/0.5x for treasury/ MOHL). Balaji Amines: Our BUY recommendation on Balaji Amines with a price target of INR 1,000 is premised on (1) robust demand from pharma and agrochemical industry that comprise 77% of its revenue mix, (2) ramp up in BSCL's production, (3) doubling of methylamines by FY24, and (4) production linked incentive scheme that provides the right tailwinds for long term volume growth. 2Q EBITDA/APAT was 25/44% above our estimates, mainly attributable to a higher-than-anticipated realisation and better product mix. Karur Vysya Bank: KVB's 2QFY21 earnings were ahead of estimates as provisions were lower than expected. While the bank's collection efficiency improved, reaching levels reported by many large stronger banks, disclosures on this front were a little ambiguous. Further, we believe that the proportion of COVID-19 related provisions is low, relative potential stress. Provisions are, therefore, likely to remain elevated as stress manifests, keeping return ratios depressed. This drives our REDUCE rating...

Asset quality guidance retained; customer recoveries better City Union Bank (CUBL) reported operating profit growth of 11% YoY and 8% QoQ on the back of opex control (flat YoY, up 7.6% QoQ) and NIM expansion. NII grew by 15.5% YoY and 8.7% QoQ. NIM expanded by 21bps YoY and 14bps QoQ to 4.12% on the back of lower cost of funds. The management continued to remain cautious about NIM, citing pressure on yields as the key reason. In light of this, the management has guided for NIM to be in the range of 3.8-4.2%. Advances growth was 6.3% YoY and 0.8% QoQ, led mainly by disbursements under ECGLS and gold loans, both of which have seen good traction. In FY21, the management expects credit growth to be in high single...

We upgrade our multiple from 1.8x to 2x on improved core performance and better visibility. Maintain a Buy with revised target price to Rs 180 (2x FY23E ABV)

City Union Bank (CUBK) posted in-line with expectations results; asset quality was largely stable with improving PCR. Margin also improved on a sequential basis. Asset quality improved on a sequential basis, with GNPA at 3.44% and NNPA at 1.81%...

Customer activity levels improving; asset quality guidance retained Our interaction with Dr. N. Kamakodi, MD/CEO of City Union Bank (CUB) reinforces our confidence in the bank's ability to handle the anticipated surge in NPAs in the near term and that it remains better positioned than peers in the regional banking space. Our positive bias on the stock stems from the fact that the management seems to have a high degree of clarity in terms of incoming stress, historical trackrecord and relatively stronger earnings profile over the forecast period. In our 1QFY21 result update, we had assessed that the management commentary on expected stress/NPA post the moratorium and restructuring indicated a firm grip and visibility on overall stress levels. Based on our interaction, the management's asset quality outlook/guidance 3-3.5% slippage, 4-5% restructuring remains...

City Union Bank (CUB) reported stable operating performance during Q1FY21. NII for the quarter grew by 5% YoY to Rs 437 cr. Operating profit of the bank grew merely by 1% YoY to Rs 356 cr. Provision remained higher due to Covid related contingent provision. CUB has made Covid provision of Rs 100 cr during the quarter, taking the total at Rs 225 cr (Rs 125 cr in Q4FY20). The bank has reported 17% decline in net profit at Rs 154 cr. On a sequential basis, bank has returned back to profitability as it had reported Rs 95 cr loss in Q4FY20, was supported by better margins, strong treasury gain and cost control. Asset quality of the bank...

Our assigned multiple reflects the bank's (1) strong PPOP profile and capital position, which are capable of absorbing shocks, and (2) consistent performance across most parameters. It remains our preferred pick amongst the mid-tier banks. CUBKs 1QFY21 earnings were ahead of our estimates on account of lower-than-expected operating expenditure and higher-than-expected treasury gains. Expectedly, sequential balance sheet growth was negligible. The sharp reduction in the proportion of the portfolio under moratorium to just ~12.5% was heartening, and the banks performance on this front is significantly better than that of its peers, despite its high share of SME loans. We maintain a BUY with a target price of Rs 164 (2.1x FY22E ABV).

City Union Bank Ltd (CUB), the oldest private sector bank in India, is a mid-sized commercial bank headquartered at Tamil Nadu, having a network of 700 branches and 1,793 ATMs spread across the country and a loan book size of Rs.34,536cr....

NII growth was healthy at 4.8% YoY to | 437 crore on account of stable margins. NIMs were down 13 bps YoY to 3.98% (flat QoQ). Other income was at | 161 crore mainly supported by healthy growth in treasury income. Muted topline growth coupled with controlled opex led operating profit to come in at | 356 crore, up 1.3% YoY, 6% QoQ. QoQ drop in provisioning led PAT to come in at | 154 crore against loss of | 95 crore in Q4FY20. Fresh slippages reduced to | 3 crore on account of standstill asset classification norms. GNPA and NNPA were down 19 bps & 18 bps QoQ to...

City Union Bank (CUBK) reported a better-than-expected performance (Rs 1,540mn PAT vs. Rs 953mn loss in Q4FY20) led by treasury gains, improved cost controls, stable NIM and contained provisions. Loan growth was moderate at 7% YoY,

City Union Banks (CUBL) 1QFY21 performance came ahead of our estimates. Given the management commentary over the past few quarters in terms of increasing competition, pressure on NIMs and a generally cautious stance in terms of lending, we had anticipated a quarter of weak growth in loans and NIM contraction. For 1QFY21, the bank reported NII growth of 4.8% YoY and 4.2% QoQ on the back of advances growth of 7.2% YoY and 1.8% QoQ coupled with 7bps QoQ expansion in NIM to 3.98%. Loan yields were down 5bps QoQ compared to a drop of 18bps QoQ in cost of deposits. The bank had taken deposit rate cuts recently, the benefit of which seems to be playing out. Overall cost of funds was down 13bps QoQ. A granular deposit profile should keep...

City Union Bank Ltd (CUB), the oldest private sector bank in India, is a mid-sized commercial bank headquartered at Tamil Nadu, having a network of 700 branches and 1,793 ATMs spread across the country and a loan book size of Rs.34,576 Cr. CUB reported net loss of Rs.95 Cr on account of higher provision (Rs.450 Cr) due to elevated NPA and Covid-19 related concerns....

Background: City Union Bank (CUB) among the smaller-sized banks in the private sector space operates a network of 700 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...

COVID-19 related management commentary: (1) The mgt indicated that 48% of borrowers under moratorium paid 2 instalments, and that ~38% paid all 3 instalments. (2) As part of its slippage guidance, the mgt envisages additional restructuring of Rs 3-4bn in FY21E. (3) ~Rs 93bn worth of loans are eligible under the NCGTC scheme, indicating potential incremental credit of ~Rs 18bn (borrowers representing ~Rs 12bn of credit have opted for the scheme), of which Rs 8.5bn has been sanctioned till date. (4) Reduced SA rates from Apr-20 to 3.5/3.75% for balances below Rs 0.1mn/ between Rs 0.1-1.0mn. CUBK reported a net loss of Rs 953mn on a/c of a jump in provisions (Rs 4.5bn), which in turn were driven by elevated NPL and COVID-19 related provisions. Asset quality deteriorated with the sharp rise in slippages. Despite the disappointing performance this quarter and premium valuations relative to peers we maintain our BUY with a TP of Rs 164 (2.1x FY22E ABV). (1) A strong PPOP profile, (2) consistent performance across most parameters, (3) management pedigree (scope for continuity of the existing MD&CEO; till 2026, subject to RBI approval) and (4) a strong capital base underpin our stance.

City Union Bank (CUBL) reported a weak quarter with NII coming in below our estimate, declining by 0.3% YoY and 1.8% QoQ. NIM contraction (down 5bps QoQ to 3.91%) was in line with the concerns the management has been highlighting for several quarters now. Operating profit, at Rs3.35bn, grew by 8.6% QoQ while it was down ~1% YoY. Overall provisions were exceptionally high at Rs4.5bn for the quarter, up 397% YoY and 456% QoQ, led by higher loan loss provisions and Rs1.25bn worth of covid-related provisions. As a result, the bank reported a post-tax loss of Rs953mn. Slippages were higher by 109% QoQ at Rs4.81bn while at the same time, write-offs too were elevated at 2.4% compared to 0.6-1% over the last several...

City Union Bank Ltd (CUB), the oldest private sector bank in India, is a mid-sized commercial bank headquartered at Tamil Nadu, having a network of 660 branches and 1,757 ATMs spread across the country...