City Union Bank Gets Board Nod For ₹500 Crore QIP Issue

City Union Bank's board on Tuesday has approved a proposal to raise up to ₹500 crore through a qualified institutional placement (QIP), alongside a 1:3 bonus issue and a dividend of ₹2 per share for FY26, as the private sector lender reported a strong set of March quarter numbers.

The qualified institutional placement will be placed as an enabling resolution at the bank's annual general meeting (AGM) scheduled for 14 August 2026. The same date has been fixed as the record date for the dividend payout. Both the bonus issue and the qualified institutional placement remain subject to shareholder approval.

At 2:54 PM on Wednesday City Union Bank shares were up 3.25%, trading at ₹205.00.

Q4FY26 Numbers

• Net profit: ₹360 crore, up 24.9% year-on-year from ₹288 crore.

• Net interest income: ₹785.8 crore, up 30.9% from ₹600.3 crore.

• Gross non-performing assets: 1.9%, down from 2.17% in the December quarter.

• Net non-performing assets: 0.68%, down from 0.78%.

• Provisions: ₹120 crore vs ₹96 crore in December quarter and ₹78 crore a year ago.

The Corporate Actions

Three separate decisions came out of Tuesday's board meeting:

The qualified institutional placement of up to ₹500 crore including premium gives the bank a capital-raising tool it can deploy if market conditions are favourable, without committing to a specific timeline. Shareholder approval at the August annual general meeting is needed before it can proceed.

The bonus issue of 1:3 means shareholders will receive one additional equity share for every three shares currently held. Like the qualified institutional placement, this requires annual general meeting approval.

The dividend of ₹2 per equity share of face value ₹1 represents a 200% payout for FY26 and will be paid on or after 14 August 2026 within the statutory timeframe.

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Asset Quality Improving

The improvement in both gross and net non-performing asset ratios points to a cleaner book heading into FY27. Provisions rose sequentially but the bank described the increase as a deliberate balance sheet strengthening measure rather than a sign of stress.

Net interest income growing at nearly 31% year-on-year while profit grew at 25% reflects strong core income generation alongside a measured approach to credit costs.

Sources:

The Economic Times

CNBC