City Union Bank Q4 Results Review: IDBI Capital Maintains 'Buy', Sees 24% Upside On Strong Credit Growth

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

IDBI Capital Report

City Union Bank Ltd. reported strong credit growth at 14% YoY (FY25) versus 6% YoY (FY24) as digitisation of lending process supported the decline in TAT. Credit growth improvement led by gold loan and MSME segment.

Management guided credit growth to be better than industry average by 200-300bps for FY26. Net interest margins remain stable at 3.6% led by increase in yield on advances. Asset quality improved as gross non-performing asset stood at 3.09% vs 3.36% led by higher write offs.

Standard restructured assets stood at 1.3% vs 1.54%. PAT grew by 13% YoY led by higher provisions. Net interest income grew by 10% YoY led by decline in NIMs. Thus, RoA remained stable at 1.5%; management guided for RoA to be maintained around 1.5% in FY26 backed by improvement in asset quality.

We have largely maintained estimates and ‘Buy’ rating with target price of Rs 215 valuing it at 1.4x price/adjusted book value FY27E.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.