City Union Bank Q1 FY27 Results (NSE: CUB)
Signal: Earnings grew
The read
Q1FY27 marks a continuation of strong improvement in asset quality (GNPA down 126bps YoY to 1.73%, NNPA to 0.61%) while NIM expanded 24bps to 3.78% on lower cost of deposits (5.56%, -39bps YoY). NII growth of 31% remains the core earnings driver, supported by healthy advances growth of 25%. Cost-to-income ratio improved 270bps to 45.42% – the bank's headline operating efficiency trend. PAT growth of 25% is clean (no exceptional items), tracking operating profit growth as provisions rose 37% on a low base.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,229 Cr | 21% | N/A |
| EBIT | ₹581 Cr | 29% | |
| Net profit | ₹383 Cr | 25% | |
| EPS | ₹0 | N/A | |
| EBIT margin | 26.06% |
P&L walk
Bank reports only standalone; consolidated not applicable.
Key positives
- NII grew 31% YoY to ₹820 Cr, the highest growth in recent quarters, aided by 39bps compression in cost of deposits.
- Asset quality improved sharply: GNPA ratio down 126bps YoY to 1.73%, and NNPA down 59bps to 0.61%; 12 consecutive quarters of sequential decline.
- Cost-to-income ratio improved 270bps YoY to 45.42%, demonstrating continued operating leverage as opex grew 16% vs revenue 21%.
- Advances grew 25% YoY, outpacing deposit growth of 21%, indicating strong credit demand; CASA grew 18%.
- RoE improved to 14.37% from 12.85% a year ago.
Key concerns
- Non-interest income flat at ₹244 Cr YoY, showing no growth in fee/other income streams.
- Provisions increased 37% YoY to ₹198 Cr, despite asset quality improvement, suggesting elevated provisioning buffer.
- Capital adequacy declined 138bps YoY to 21.72%, partly due to higher risk-weighted asset growth.
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