Mumbai: City Union Bank's net profit rose nearly 16% on year to 1.82 bln rupees in September quarter, aided by fall in provisions. Sequentially, the bank's bottomline rose 5.26%. Analysts had expected the Kumbakonam-based bank to post a net profit of 1.4 bln rupees. The bank's provisions fell to 1.48 bln rupees in Jul-Sep, from 1.77 bln rupees a year ago.
Provision coverage ratio stood at 61.86% as on Sep 30. In terms of asset quality, gross non-performing asset ratio and net NPA ratio were at 5.58% and 3.48%, respectively, as on Sep 30, largely unchanged on a sequential basis. In the second round of COVID-19 led resolution of stressed assets for individuals and small businesses, the bank restructured 950 accounts worth 1.95 bln rupees. As on Sep 30, outstanding balance in standard restructured accounts was at 22.48 bln rupees, and the bank held a provision of 1.67 bln rupees towards the same.
The bank's business model targets the small and medium enterprises segment, and the micro, small and medium enterprises segment, an investor presentation said. In Jul-Sep, the bank restructured 45 standard accounts to the tune of 3.22 bln rupees under the MSME segment, and 295 accounts to the tune of 927 mln rupees under the non-MSME segment, according to the presentation. On the bank's core metrics, net interest income rose 1% on year to 4.78 bln rupees in Jul-Sep.
Net interest margin fell to 4.03% in the September quarter, from 4.12% a year ago. Advances rose 7% on year to 380.12 bln rupees, while deposits rose 12% on year to 463.16 bln rupees as on Sep 30. Among total deposits, current account savings account deposits rose 26% on year to 134.11 bln rupees as on Sep 30. CASA ratio stood at 29% of overall deposits. Cost of deposits fell to 4.82% in Jul-Sep from 5.54% a year ago. Basel III capital adequacy ratio rose to 19.24% as on Sep 30, from 17.36% a year ago. Today on the National Stock Exchange, shares of City Union Bank closed 0.40% lower at 163.85 rupees.
