City Union Bank Performs Well In Q1FY14

City Union Bank came up with its June 2013 quarter results post market hours on July 29, 2013. The bank performed well for the first quarter of FY14. Its operating income showed growth of 25% to stand at Rs 708 crore, contributed by growth of Rs 120 crore to Rs 624 in the interest income. On segment basis, its primary revenue driver is retail banking, which contributed almost 53% of its overall revenue. This segment showed growth of 28% to Rs 379.5 crore in Q1FY14 over the similar period of the last fiscal. While the other two segments - treasury and corporate banking also showed good revenue growth.

The bank's operating expenses (which mainly rose due to an increase in interest expended), mounted by 21% to Rs 546 crore in the June quarter on a yearly basis. Its other operating expenses like employee costs and administrative expenses too increased due to the rise in workforce. Although the bank's expenditure increased in Q1FY14 on a yearly basis, it has declined over the last fiscal as a percentage of revenue. On the other hand, the bank's provisions and contingencies showed a huge decline of 53% to Rs 20.53 crore on a sequential basis, while it has gone up by 2.8% on a yearly basis.

Further, during the said period, the operating income boosted by 41% to Rs 161.53 crore on a YoY basis. The bank's NII jumped to Rs 187 crore, up by 36% over the last fiscal. The bottomline of the bank has neared the Rs 100 crore benchmark, at to Rs 90.25 crore.

Contrary to the bad performance of other banking sector players, City Union Bank's net NPAs remained unchanged at 0.63% on a sequential basis. On the other hand, its gross NPA rose by 12 basis points to 1.25% on a sequential basis. Moreover, on a yearly basis, both the gross and net NPA surged by 18 basis points and 13 basis points respectively.