City Union Bank (CUB) Q1 24/25 earnings summary

Executive summary

• Achieved positive credit growth in Q1 FY25 for the first time in a decade, with advances up 10% year-over-year to INR 46,548 crore.

• Deposits grew 6% year-over-year to INR 54,857 crore, and average CD ratio stood at 84%.

• Digital lending initiatives, strengthened management, and a robust digital transformation strategy are driving early growth momentum, with a focus on MSME and expansion into secured retail lending.

• Asset quality improved, with recoveries exceeding slippages and gross NPA ratio declining to 3.88%.

• ROA restored to 1.5%+ and PAT grew 16% year-over-year to INR 264 crore.

Financial highlights

• Advances increased from INR 42,405 crore in Q1 FY24 to INR 46,548 crore in Q1 FY25.

• Deposits rose from INR 51,655 crore to INR 54,857 crore year-over-year.

• Interest income grew 10% year-over-year to INR 1,389 crore.

• NIM for Q1 FY25 was 3.54%; cost-to-income ratio at 49.34%.

• PAT at INR 264 crore, up 16% year-over-year.

Outlook and guidance

• Double-digit advances growth targeted for FY25, with momentum expected to accelerate.

• ROA expected to remain at or above 1.5% for the next several quarters.

• Cost-to-income ratio projected to stay in the 48%-51% range for the next 4-6 quarters due to upfront investments.

• Digital lending and automation initiatives expected to enhance operational efficiency and customer experience.

• Focus remains on secured retail lending; unsecured retail lending is a long-term test case.