City Union Bank (CUB) announced its Q2 FY26 results, showcasing a 15% growth in Profit After Tax (PAT). Advances grew by 18% year-on-year, while deposits increased by 21%. The bank’s Gross NPA ratio improved to 2.42%, with Net NPA falling below 1%. CUB expects to maintain a stable Net Interest Margin (NIM) and aims for a cost-to-income ratio between 48% and 50% for the fiscal year.
Financial Performance Highlights
City Union Bank (CUB) has demonstrated strong financial performance in Q2 FY26:
- Advances grew by 18% year-on-year.
- Deposits increased by 21%.
- Net Interest Margin (NIM) increased to 3.63%.
- Operating profit grew by 15%.
- Profit After Tax (PAT) grew by 15% to INR 329 crores.
Asset Quality Improvement
CUB has shown significant improvement in asset quality:
- Gross NPA reduced to 2.42% in Q2 FY26 from 2.99% in Q1 FY26.
- Net NPA reduced to 0.90% in Q2 FY26, a 72 bps year-on-year reduction, falling below 1% after 46 quarters.
- SMA numbers stood around 5.60%, showing significant improvement.
- The bank’s Provision Coverage Ratio (PCR) with TW stood at 82%.
Strategic Initiatives and Outlook
City Union Bank is focusing on several strategic initiatives:
- Building a renewable energy portfolio of INR 2,500 crores in the next 24 to 30 months.
- Expecting deposit growth to align with credit growth.
- Expecting a stable NIM with a positive bias in Q3 and Q4.
- Maintaining ROA at current levels of over 1.5%.
- Expecting the cost-to-income ratio to remain in the range of 48% to 50% for FY26.
Growth Drivers and Future Plans
The bank is leveraging its core strength in MSME and gold loans, while also venturing into new avenues to sustain growth momentum. CUB is confident about surpassing industry-level growth in the future. The bank secured a commitment of USD 50 million from IFC to support MSMEs in transitioning to energy-efficient solutions.
The bank plans to add approximately 75 branches annually.
Source: BSE
