## City Union Bank City Union Bank is an old private sector bank. It was founded in 1904 as Kumbakonam Bank Limited. It is headquartered in Kumbakonam, Tamil Nadu. In 1987 it adopted the name City Union Bank. The bank has a strong presence in South India, especially Tamil Nadu. It offers a wide range of banking products and services to retail, corporate, agricultural customers. City Union Bank operates over 750 branches across India. It has over 4 million customers. Total business size is more than Rs 80,000 crore. The bank has around 5,300 employees. City Union Bank is listed on NSE and BSE. Market capitalization is over Rs 8,500 crore. Promoters hold about 28 percent stake in the bank. ## Key Financial Metrics and Ratios Financial Performance (FY24 and H1 FY25) - **Net Interest Income (NII)** FY24 ₹21,235 crore, a slight decline of 1.8% compared to ₹21,628 crore in FY23.
H1 FY25 ₹1,128 crore, up 6% from ₹1,061 crore in H1 FY24.
- **Operating Profit** FY24 ₹15,167 crore, down 16.6% from ₹18,180 crore in FY23.
H1 FY25 ₹802 crore, nearly flat compared to ₹801 crore in H1 FY24.
- **Net Profit** FY24 ₹10,157 crore, an 8.3% increase from ₹9,375 crore in FY23.
H1 FY25 ₹550 crore, up 8% from ₹508 crore in H1 FY24.
- **Earnings Per Share (EPS)** Q2 FY25 Basic EPS stood at ₹3.85 compared to ₹3.57 in Q2 FY24.
## Key Ratios (H1 FY25 and Q2 FY25) - **Return on Assets (RoA)** Q2 FY25 1.59%, an improvement from 1.51% in Q2 FY24. - **Capital Adequacy Ratio (CAR)** As of March 2024 23.7%, up from 22.3% in March 2023. - **Gross Non-Performing Assets (GNPA)** Q2 FY25 GNPA ratio at 3.54%, better than the previous quarter's ratio of 3.88%. - **Net Non-Performing Assets (NNPA)** Q2 FY25 NNPA ratio at 1.62%, improved from 1.87% in the previous quarter. - **Provision Coverage Ratio (PCR)** The bank continues to maintain a high PCR above 80%, reflecting prudent provisioning practices. ## Growth Highlights - Interest income grew by approximately 10% in both Q2 and H1 FY25 compared to the same periods last year.
- Non-interest income also saw robust growth of 24% for Q2 FY25 and 12% for H1 FY25.
- Advances increased by 11.5% YoY, reaching ₹48,722 crore as of September 2024.
- Deposits rose by 8.8% YoY, standing at ₹57,369 crore as of September 2024.
## Asset Quality and Efficiency - The bank demonstrated improvement in asset quality with declining GNPA and NNPA ratios. - Cost-to-income ratio increased to 47.06% in FY24 due to higher operating expenses but remains manageable. ## Business Segments and Revenue Mix City Union Bank has four business segments: - Treasury Investments, forex, derivatives, money markets. About 22 percent revenues.
- Corporate Banking Loans and services to companies. 32 percent revenues.
- Retail Banking Deposits, mortgages, gold loans for individuals. 35 percent revenues.
- Other Banking Credit cards, third party products, demat. 11 percent revenues.
Retail banking is the largest followed by corporate banking. Focus is growing retail loan books. ## Loan Portfolio Analysis Loan Portfolio Overview (FY25) - Total Advances as of Q2 FY25, CUB's gross advances stood at ₹48,722 crore, reflecting a 12% year-on-year growth from ₹43,688 crore in Q2 FY24. **Loan Mix (Q1 FY25)** - Retail Loans Retail lending has gained focus, particularly in secured segments like home loans and loans against property (LAP). Retail loans now constitute approximately 38% of the loan book, driven by housing loans and personal loans. - MSME Loans MSME lending remains a core focus area, forming around 49% of the loan book. This segment benefits from CUB's expertise and relationships in semi-urban and rural regions. - Agriculture Loans Agri loans, including gold-backed loans, account for about 25% of gross advances. The bank has reduced its Kisan Credit Card (KCC) exposure but is seeing growth in other agri segments. - Corporate Loans The proportion of corporate loans has declined as the bank pivots towards retail and MSME lending. However, it continues to lend selectively to large industries and wholesale traders. ## Key Developments **1. Digital Lending Initiatives** CUB has implemented digital lending processes to reduce turnaround times and enhance underwriting efficiency. This initiative primarily targets retail and MSME segments. Unsecured retail lending has been introduced on a pilot basis for salaried customers, with yields ranging between 13–14%. **2. Co-Lending Partnerships** The bank is collaborating with NBFCs to expand its reach in vehicle financing, gold loans, and housing loans. These partnerships aim to diversify risks and scale operations. **3. Shift in Focus** CUB is increasing its emphasis on secured retail loans while gradually reducing its reliance on agriculture and corporate segments. This strategy aligns with its goal of achieving double-digit loan growth in FY25. ## Risk Diversification - The bank's granular asset profile, with a high proportion of secured lending (99%), ensures better risk management. Small-ticket loans across retail and MSME segments further diversify risk exposure. The bank’s strategic shift towards retail and MSME lending, supported by digital transformation and co-lending partnerships, positions the City Union Bank share price for sustained growth while maintaining a prudent risk profile. ## Digital Transformation Progress - Finacle core banking across all branches.
- Mobile and internet banking provide 24x7 access.
- 94 percent transactions now via mobile/internet banking and ATMs.
- Launched digital personal loans with minimal documentation.
- Tie-ups with fintechs for digital merchant acquisition.
Aim is improving customer experience and convenience through more technology adoption. But progress is gradual versus new generation private banks. ## Distribution Network Analysis - Over 750 branches across 21 states and 4 union territories.
- About 89 percent branches in Tamil Nadu highlights concentration risk.
- Presence in key metros like Chennai, Bangalore, Mumbai.
- Recently opened MSME and agri focused specialty branches.
- Also 1,600+ ATMs for wider coverage.
While expanding in North and West India, need to accelerate for diversification beyond home state. ## Outlook and Way Forward - Loyal customer base in Tamil Nadu through relationship banking over decades.
- Steady branch expansion and technology investments supported growth beyond home state.
- Retail lending focus and geographically distributed corporate book lends stability.
- But competition from large banks is a challenge. Should aggressively grow low cost CASA.
- Strong Tier-1 ratio and prudent provisioning makes it well-placed to tap opportunities.
- Can potentially be an acquisition target for larger banks wanting South India expansion.
## Brief Overview City Union Bank has come a long way from its inception. Taking into account its growth, it can be said that City Union Bank has solid long-term prospects. However, it needs faster diversification and digitization to compete effectively a competitive landscape.


Total Qtr Revenue cr
Operating Expenses Qtr
Operating Profit Qtr
EBITDA Qtr Cr
Depreciation Qtr
Net Profit Qtr
Basic EPS Qtr

City Union Bank Financials Statements