Arihant Capital's research report on City Union Bank
City Union Bank reported mixed set of numbers in Q3FY19 supported by NII growth. Profit for the quarter grew by 15% at Rs. 178 cr vs Rs. 155 cr in corresponding quarter of previous fiscal year. Loan growth of the bank remained steady at 17% leading to 15% jump in NII at Rs. 418 cr resulting to stable margins offset by decline in cost of deposits despite a decline in yield on advances. Operating profit for the quarter grew by 3.5% YoY at Rs. 307 cr. Other income for the quarter de-grew by 1.5% at Rs. 120 cr due to decline in bank's treasury book. Asset quality of the bank deteriorated marginally with a 6 bps rise in its GNPAs at 2.91% vs 2.85% on sequential basis. Management has given steady outlook going forward and retained credit growth guidance of 18-20% which we have factored in our estimates.
Outlook
We remain positive on CUB's growthand believe it will sustain their performance. Maintain HOLD rating with TP of Rs. 205.
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Read More First Published on Mar 1, 2019 03:35 pm
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