City Union Bank Q1 Results: Core income grows 31%, asset quality strong; Stock up 8%

Shares of Kumbakonam-based private lender City Union Bank Ltd. surged as much as 10% on Tuesday, July 28, in response to its June quarter results, that were strong on a year-on-year basis, along with improved asset quality.

City Union Bank's Net Interest Income, or core income for the quarter stood at ₹820 crore, a growth of 31% from last year's figure of ₹625 crore.

Net profit for the period stood at ₹383 crore from ₹306 crore last year, implying a growth of 25%.

Asset quality for the lender improved on a sequential basis. Gross NPAs for the quarter stood at 1.73% from 1.91% in the March quarter, while Net NPA stood at 0.61%, better than the 0.68% it reported in the previous quarter.

In absolute terms, City Union Bank's gross NPA improved to ₹1,170 crore from ₹1,273 crore in the previous quarter, while Net NPA also improved to ₹405 crore from ₹449 crore in the previous quarter.

Provisions for the quarter also declined to ₹78 crore from ₹120 crore in the March quarter, which contributed to its profitability.

City Union Bank's operating profit during the quarter increased by 29% from last year to ₹581 crore.

In its post-results release, City Union Bank reported that its deposits grew by 21% from last year to ₹79,342 crore, while advances saw growth of 25% on a year-on-year basis to ₹67,645 crore.

CASA for the quarter stood at ₹21,094 crore, a growth of 18% from last year's figure of ₹17,951 crore.

Net Interest Margin for the quarter expanded by 24 basis points to 3.78% from 3.54% last year.

Shares of City Union Bank are trading 8.5% higher after the results announcement at ₹239.2. The stock has now extended its year-to-date gain to 10%.