City Union Bank Q2 Results - IDBI Capital Maintains 'Buy' Rating On The Stock; Here's Why

IDBI Capital Report

City Union Bank Ltd. reported improvement in credit growth during Q2 FY25 as digitisation of process supported the decline in TAT. Credit growth improved to 12% YoY (versus 10% YoY Q1 FY25) led by gold loan and MSME segment.

Further, management guided credit growth to be better than industry average for FY25. Net interest margins improved by 13 bps QoQ to 3.67% led by increase in yields.

Asset quality improved as gross non-performing asset stood at 3.54% versus 3.9% led by higher write offs. Standard restructured assets stood at 1.76% vs 1.78%. PAT grew by 1% YoY led by higher provisions. Net interest income grew by 8% YoY led by decline in NIMs. Thus, RoA remained stable at 1.5%; management guided for RoA to be maintained around 1.5% in FY25 backed by improvement in asset quality.

We have largely maintained our estimates and ‘Buy’ rating with target price of Rs 200 valuing it at 1.5 times price/adjusted book value FY26E.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.