City Union Bank Q2 FY27 Results (NSE: CUB)
Signal: Earnings grew
The read
The trajectory remains constructive: total income grew 27.7% YoY to ₹244246.10 lakh, operating profit grew 38.3% to ₹65091.21 lakh and margin expanded 204bps to 26.65%, while GNPA improved to 1.44% from 2.42% YoY. The main watchpoint is that provisions rose 110.5% YoY to ₹12000 lakh, including a ₹5000 lakh contingent provision, even as PAT grew 26.6% to ₹41591.21 lakh.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,442.46 Cr | +27.7% | +9.8% |
| EBIT | ₹650.91 Cr | +38.3% | |
| Net profit | ₹415.91 Cr | +26.6% | |
| EPS | ₹4.2 | +26.5% | |
| EBIT margin | 26.65% |
P&L walk
Total income increased to ₹244246.10 lakh, +27.7% YoY and +9.8% QoQ, while operating profit rose 38.3% YoY to ₹65091.21 lakh and margin expanded 204bps to 26.65%; PAT grew 26.6% to ₹41591.21 lakh despite provisions rising 110.5% YoY and a ₹5000 lakh contingent provision for unforeseen economic uncertainties.
Segments
Retail Banking drove the group with revenue of ₹143917 lakh, +27.2% YoY, and segment result of ₹30315 lakh, +60.8%; Treasury also grew 21.1% in revenue and 20.9% in result, while Digital Banking remained marginally loss-making at ₹3 lakh.
Key positives
- Operating profit reached ₹65091.21 lakh, +38.3% YoY versus total-income growth of +27.7%, expanding the operating margin by 204bps to 26.65%.
- Advances grew 37.1% YoY to ₹7774266.61 lakh, outpacing deposits growth of 20.7% to ₹8389311.92 lakh and supporting 53.8% YoY growth in derived net interest income to ₹87276.22 lakh.
- Asset quality improved materially: GNPA fell to 1.44% from 2.42% YoY and NNPA to 0.48% from 0.90%, while capital adequacy rose to 27.26% from 21.68%.
Key concerns
- Provisions and contingencies increased 110.5% YoY to ₹12000 lakh, including a ₹5000 lakh contingent provision for unforeseen economic uncertainties.
- Other income increased 35.2% YoY to ₹35020.88 lakh and includes securities transactions, investment revaluation, recoveries and miscellaneous income, making the quality of non-interest earnings important to monitor.
- Advances grew 37.1% YoY versus deposits growth of 20.7%, increasing reliance on borrowings and other funding sources as borrowings stood at ₹528039.14 lakh.
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