City Union Bank Ltd. share price target

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%....

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.