City Union Bank Ltd's Q4FY18 standalone net profit rises 18.02% yoy to Rs152.10cr : Misses Estimates

The bank’s standalone NII stood at Rs368cr, up 18.5% yoy and 0.79% qoq.

May 28, 2018 04:05 IST India Infoline Research Team

City Union Bank Ltd Q4FY18

Standalone Results Q4FY18: ( cr)

Q4FY18 YoY (%)
NII 368 18.5
NPA (%) 3 20
Provisions 86.15 20.9
Net Profit (adjusted) 152.10 18.0
***NPA change is bps
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Buy

Reco. Price

190

Last updated on

23-May-2018

City Union Bank's Q4FY18 revenue has improved by 7% yoy to Rs990.5cr. The bank’s NII for the quarter came at Rs368cr as against Rs310.6cr yoy, which is a growth of 18.5%. The bank has reported net profit of Rs152.1cr, (which was below estimates) against Rs128.9cr reported in corresponding quarter last year. Its GNPA for Q4FY18 stood at 3.03% against 3.3% qoq, which has decreased by 27bps. NNPA for the quarter came at 1.7% against 1.74% qoq, which has declined by 4bps.
  • Higher NII growth was aided by ~17% yoy growth in advances to Rs28,239cr. Good growth was witnessed in MSME, Personal and Wholesale traders. The bank remains cautious in the corporate segment.
  • Management has guided for 18-20% advances growth for FY19E.
  • MSME share of total loans has moved up to 34% in FY18 from 30% in FY17.
  • Yields for Q4Y18 came at 11.19% as against 11.46% for FY18.
  • NIMs for the quarter came at 4.42% as against 4.41% yoy.
  • Increase in CASA share and low cost of funds contributed to the improvement in NIM. However, management expects hardening of interest rates and competition may contract margins going ahead.
  • CD ratio of the bank for FY18 stood at 85% as compared to 79% from FY17.
  • CASA ratio has improved by 80bps yoy to 24.2%.
  • The provision for the quarter came at Rs86.2cr as against Rs71.3cr yoy.
  • Slippages came at Rs150cr as one textile account slipped into NPA.
  • Bank has 2 accounts in NCLT cases with an exposure of Rs70 cr.
  • The bank has not done ARC sale during Q4FY18 as well as FY18. Also, the bank has not restructured any accounts during the quarter.
  • 50 branches have been opened during the quarter and the total branches stood at 600 as on FY18 end. It expects to open 75 branches in FY19E.
  • Management has guided for 1.5-2% slippage ratio for FY19E. It expects cost-to-income ratio to remain at elevated level. Also, as per management, the credit cost for FY19E should not be crossing FY18 figure.
  • The board has declared bonus in the ratio of 1:10.


Technical View:

City Union Bank Ltd is currently trading at Rs. 182.50, down by 1.55 points or 0.84% from its previous closing of Rs. 184.05 on the BSE.
The scrip opened at Rs. 185 and has touched a high and low of Rs. 190.10 and Rs. 176.25 respectively. So far 19,93,484 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 50 DMA.

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