City Union Bank Limited stands as one of India's prominent private sector banks, particularly in the South Indian market. Established in 1904, City Union Bank Ltd has grown to a network of 700 branches and 1749 ATMs in 30 years, with 485 branches located in the state of Tamil Nadu. Headquartered in Tamil Nadu, it has a strong presence in South India with 875 branches as of March 2025.
The bank operates as a scheduled commercial bank offering comprehensive banking and financial services to its customers. The Bank is engaged in providing a wide range of Banking and Financial Services including Commercial Banking and treasury operations. The bank's products and services include savings accounts, current accounts, fixed deposits, cash certificates, ATM services, demand drafts, phone transfers, and more.
City Union Bank has a market capitalization of ₹16,100 Crore as of March 2025, up 27.8% in 1 year. The bank's stock has shown strong performance over various time periods:
- Last 3 Months: City Union Bank Ltd share price moved up by 19.25% on BSE.
- Last 12 Months: City Union Bank Ltd share price moved up by 17.02% on BSE.
- Last 3 Years: City Union Bank Ltd share price moved up by 54.06% on BSE.
The bank reported revenue of ₹5,834 Crore and profit of ₹1,124 Crore for the recent period. City Union Bank announced a 13% increase in net profit to ₹288 Crore for Q4 FY25, alongside a 200% dividend recommendation. City Union Bank Ltd's revenue jumped 15.14% since last year same period to ₹1,783.94 Crore in Q4 FY2024-2025. On a quarterly growth basis, City Union Bank Ltd has generated 4.5% jump in its revenue since last 3-months.
The bank's financial performance in FY24 showed mixed results with some key metrics experiencing pressure:
- Net Interest Margin (NIM): Net interest margin declined from 3.8% in FY23 to 3.5% in FY24.
- Net Profit Margin: Net profit margins fell from 19.9% in FY23 to 19.3% in FY24.
- Interest Income Growth: Interest income during the year rose 11.8% on a year-on-year (YoY) basis.
- Net Profit Growth: Net profit for the year increased by 8.3% YoY.
The bank's deposits during FY24 stood at ₹556.6 billion as compared to ₹524.0 billion in FY23, thereby witnessing an increase of 6.2%. Advances for the year stood at ₹455.3 billion as compared to ₹430.5 billion during FY23, a rise of 5.7%.
City Union Bank has demonstrated improvements in asset quality parameters, which is crucial for banking sector performance. CITY UNION BANK's gross NPA ratio stood at 4.0% as of March 31, 2024, compared to 4.4% in the same period a year ago. The net NPA ratio of CITY UNION BANK was 2.0% in financial year 2024, compared with 2.4% a year ago.
The bank maintains strong capital adequacy metrics, ensuring financial stability. CITY UNION BANK's capital adequacy ratio (CAR) was at 23.7% as on March 31, 2024, as compared to 22.3% a year ago. This robust capital position provides adequate buffer against potential losses and regulatory requirements.
City Union Bank, a midcap private bank, has reported a positive financial performance in the September 2024 quarter. The bank's low gross NPA ratio and increasing interest earned indicate a decrease in stressed loans and a positive trend in sales. In terms of profitability, the bank has shown a positive trend in its profit after tax (PAT) in the last five quarters, with the highest PAT of ₹285.18 Crore in the September 2024 quarter.
City Union Bank Ltd has the main focus of providing short-term and long-term loans to the agrarian and MSME retail/wholesale trade sectors, and takes into account risks associated with such operations with its Credit Risk Management. This strategic focus on agriculture and MSME segments aligns with the bank's regional presence and expertise in understanding local business dynamics.
Despite positive performance trends, the bank faces certain challenges that require attention. The company has delivered a poor sales growth of 6.95% over the past five years. However, the bank needs to address its falling operating cash flow and high non-operating income for sustainable growth. Additionally, there are some areas that the bank needs to work on, as seen in its operating cash flow, which has been falling each year in the last three years.
In the quarter ending March 2024, City Union Bank Ltd has declared a dividend of ₹1.50, translating to a dividend yield of 1.27%. The bank has maintained a consistent dividend policy, rewarding shareholders while retaining sufficient capital for growth.
City Union Bank continues to maintain its position as a significant player in the South Indian banking sector, with strong regional presence and focus on key sectors like agriculture and MSME lending. While facing certain operational challenges, the bank's improving asset quality and strong capital position provide a solid foundation for future growth.
