City Union Bank Ltd. share price target

Background: City Union Bank (CUB) among the smaller-sized banks in the private sector space operates a network of 550 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...

Maintain BUY with a revised TP of 197 (3xFY19E ABV of Rs 66). City Union Bank (CUBK) beat our estimates substantially, despite conservative provisions of Rs 300mn towards SR and increasing coverage (+62%, +100bps QoQ). This was led by a resilient NIM performance (4.47%, +27bps QoQ), healthy fees (+20% QoQ) and moderation in opex growth (16% YoY). Though slippages remain elevated at 2.45% ann, overall stress levels were stable QoQ (net NPA + restructured book) at 2.3%.

ICICI Securities Ltd | Retail Equity Research Timken India (TIL) reported weak Q1FY18 numbers. The company reported topline, EBITDA and PAT, which were below our estimates Revenues came in at | 300 crore, up 6.3% YoY and below our...

City Union Bank (CUB) reported Q1FY18 results with quarterly PAT growing 14% yoy to INR 140 cr. While loan growth was moderate at 13% yoy, CUB continued to deliver...

City Union Bank (CUB) is a mid-sized private sector bank with a INR24,112cr loan book and a distribution network comprising 550 branches.

Background: City Union Bank (CUB) among the smaller-sized banks in the private sector space operates a network of 550 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...

The bank reported a steady set of numbers, which were largely inline with our estimates PAT came in at | 128.9 crore (up 14.8% YoY) vs. our estimate of | 127 crore. Traction in PAT was largely aided by lower-thanexpected provisions of | 71 crore (I-direct estimate: | 87 crore) Asset quality came in healthy with GNPA ratio falling 16 bps QoQ to 2.83%. Absolute GNPA increased by | 32 crore to | 682 crore, which was lowest QoQ increase in last two years. Slippages were a bit higher at | 138 crore but offset by higher recoveries and write-offs Advances book grew 13.2% YoY to | 23833 crore while deposit...

Healthy pace in branch network with ~300 new branches since FY11, we anticipate 100 new branches over the next two years. Loan book is expected to grow at a healthy CAGR of 15% over FY16-19E, while asset quality to improve from FY18E onwards. Net Interest Margins (NIM) would improve by 58bps led by lower cost of funds, while PAT to grow by CAGR of 19% over FY16-19E. CUB has superior ROE among mid-sized private banks which justifies a premium valuation over its peers. We value CUB at 2.3x FY19E Adj.BV with a...

City Union Bank (CUB) reported PAT of Rs.127 cr for Q3FY17 (up 12% YoY) against Rs. 113 cr in Q2FY16, this earning growth was mainly supported by 21.4% YoY growth in Net interest income. Loan growth for Q3 FY17 has declined to 13% YoY from 18% in Q2 FY17.

Demonetization impacted the overall performance with 1) Lower advances growth of ~12% YoY & flattish QoQ on back of lower demand & higher than expected repayments (~Rs.4-5 bn), 2) Lower focus on collections resulting in lower recoveries/up-gradations & 3) Higher operating cost. However, deposits witnessed healthy growth which grew by 15% YoY & 6% QoQ with CASA witnessing strong growth of ~47% YoY & 22% QoQ; CASA ratio improved by ~300 bps to 23.9%. NIMs stood at 4.18% vs 4.20% QoQ; management expects some contraction in NIMs on...