City Union Bank Posts Q3FY13 Numbers

City Union Bank today reported its Q3FY13 numbers. For the December 2012 quarter, the Net Interest Income (NII) of the bank grew by 33% to Rs 163 crore, while its Net Profit came in higher by 18% to Rs 85 crore on a YoY basis. Provisions of the bank also increased by 21% to Rs 31 crore on a YoY basis. The stock witnessed a muted reaction to the results, currently trading lower by 0.33% to Rs 60.95 per share. Following are some of the key financial parameters of the bank:

The bank witnessed some pressure on the asset quality front which deteriorated further. The Gross and Net NPA of the bank increased by 6 and 12 basis points to 1.23% and 0.63% respectively on a YoY basis. Further, if compared on a sequential basis, the Net NPA increased by 3 basis points, while Gross NPA decreased by one basis point. 

As on December 31, 2012, the Capital Adequacy Ratio (CAR) of the bank stands at 12.39%, slightly above 12.35% in the similar period last year. Return on Assets of the bank declined by 6 basis points to 1.65% on a YoY basis.

On the segmental front, the Treasury segment performed extremely well as revenue from the same grew by 25% to Rs 105 crore, while its Profit almost doubled, standing at Rs 34 crore against Rs 17 crore in the similar period last year. Revenue from wholesale banking sector increased by 36% to Rs 186 crore. However, profit remained unchanged at Rs 48.64 crore.

While uploading the article, limited information was available on the bank’s performance. Overall, we believe that the bank posted a decent set of numbers for the December quarter, while asset quality still remains a concern.

On the valuation front, the bank is currently available at a Price to Book value of around 1.7x, which we believe is fairly valued. We would advise our readers to invest in the stock in a staggering manner, keeping in mind a long-term horizon to garner better returns.