Kumbakonam, January 31, 2025 – City Union Bank Limited (BSE: 532210, NSE: CUB) has posted a strong financial performance for the third quarter (Q3) of the financial year 2025, ending December 31, 2024. The bank reported a net profit of ₹28,599 lakhs, reflecting a 13.3% YoY increase from ₹25,303 lakhs in Q3 FY 2024.
Key Financial Highlights (₹ in Lakhs)
| Particulars | Q3 FY 2025 | Q2 FY 2025 | Q3 FY 2024 | 9M FY 2025 | 9M FY 2024 |
|---|---|---|---|---|---|
| Total Income | 170,712.36 | 166,062.63 | 151,911.38 | 494,816.34 | 446,287.54 |
| Net Interest Income (NII) | 58,713 | 55,928 | 51,159 | 161,319 | 153,589 |
| Operating Profit | 43,599.54 | 42,817.71 | 36,403.35 | 123,766.28 | 116,491.23 |
| Provisions & Contingencies | 7,500.00 | 7,000.00 | 4,600.00 | 18,000.00 | 25,400.00 |
| Profit Before Tax | 36,099.54 | 35,817.71 | 31,803.35 | 105,366.28 | 91,091.23 |
| Net Profit | 28,599.54 | 28,517.71 | 25,303.35 | 83,566.28 | 76,091.23 |
- Net Interest Margin (NIM): 3.58% (Q3 FY25), improving from 3.50% in Q3 FY24.
- Return on Assets (ROA): 1.57%, up from 1.49% in Q3 FY24.
- Return on Equity (ROE): 12.64%, a slight increase from 12.57% in Q3 FY24.
Segment-Wise Performance
- Corporate & Wholesale Banking: Revenue stood at ₹38,056 lakhs, showing strong demand for business loans.
- Retail Banking: Revenue reached ₹100,989 lakhs, supported by stable deposits and growing digital transactions.
- Treasury Operations: Revenue was ₹29,575 lakhs, impacted by market conditions.
Asset Quality & Key Ratios
- Gross NPA: ₹16,930.58 lakhs, with a Gross NPA ratio of 3.36%, improving from 4.47% YoY.
- Net NPA: ₹7,013.02 lakhs, with a Net NPA ratio of 1.42%, down from 2.19% YoY.
- Provision Coverage Ratio (PCR): 77% (including technical write-offs), reinforcing asset quality.
- Capital Adequacy Ratio (Basel III): 22.26%, of which Tier 1 Capital stands at 21.29%.
Strategic Initiatives & Digital Banking Expansion
City Union Bank is investing heavily in digital banking, as highlighted in its investor presentation:- Digital Lending Process introduced in 2024 to streamline loan approvals.
- WhatsApp Banking, AI Chatbots, and UPI-based credit solutions for enhanced customer engagement.
- Bank-wide API integrations to support digital onboarding and lending.
- Awarded for Digital Banking Excellence at the Indian Banks’ Association (IBA) Technology Awards 2024.
Management Commentary
Dr. N. Kamakodi, MD & CEO of City Union Bank, stated:"Our Q3 performance highlights our strong fundamentals, with steady revenue growth and improving asset quality. The bank remains committed to digital transformation while maintaining prudent risk management. The focus is on strengthening our MSME and retail lending portfolio, ensuring long-term sustainability."
Future Outlook
- Deposit Growth: Deposits grew by 11% YoY to ₹5,82,713 lakhs, driven by an increase in CASA (current and savings accounts) to ₹1,61,319 lakhs.
- Advances Growth: Advances rose 15% YoY to ₹5,04,093 lakhs, reflecting a robust lending environment.
- Cost to Income Ratio: Improved to 46.58% from 48.64% YoY, indicating better operational efficiencies.
Conclusion
City Union Bank has delivered a strong Q3 performance, marked by double-digit profit growth, robust loan growth, and improved asset quality. Meanwhile, Akzo Nobel India's ongoing tax litigation is under review but does not pose a significant financial risk at this stage. Investors in both companies should watch for updates on regulatory compliance and digital banking expansion, which will shape their long-term growth trajectory.
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