City Union Bank (CUB) Q2 26/27 earnings summary

Executive summary

• Total business reached INR 156,330 crore; deposits rose 21% YoY to INR 83,893 crore and advances grew 26% to INR 72,442 crore.

• Q2 PAT increased 27% YoY to INR 415.91 crore; H1 PAT rose 26% to INR 798.49 crore.

Financial highlights

• Q2 NII rose 31% YoY to INR 872.8 crore; H1 NII increased 31% to INR 1,692.9 crore.

• Q2 other income rose 35% to INR 350.21 crore, driven mainly by ARC recoveries and INR 137 crore of technically written-off account collections.

• Q2 operating profit rose 40% YoY to INR 660.91 crore; H1 operating profit increased 35% to INR 1,241.49 crore.

• Q2 operating expenses increased 23% to INR 562 crore, including the annual wage hike; provisions and contingencies rose 73% to INR 245 crore.

• Q2 included a INR 50 crore contingent provision for unforeseen economic uncertainties.

Outlook and guidance

• Targeting credit growth 2%-3% above industry, with deposits aligned to credit growth; secured lending, MSME, retail and gold loans remain growth avenues.

• Q3-Q4 NIM expected at 3.85%-3.95%; FY27 ROA targeted at 1.6%-1.65% and cost-to-income at 45%-47%.

• Deposit growth of 20% over the next two years was described as challenging; sustained 21%-22% growth remains uncertain.

• Deposit cost may rise 10 bps next quarter; FY27 tax rate expectation is 21%-23%.