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City Union Shares Fall 10%, Near 52-Week Lows on Disappointing Q4 Results

Shares of City Union Bank plunged 10% after Q4 numbers were released.

Shares of City Union Bank fell 10% to Rs 126 on the BSE in intraday trade on Monday after the bank reported a disappointing string of figures for the quarter ended March 2023 (Q4FY23). The portion is huge. Shares of the private bank were quoted near the 52-week low of Rs 120.45 hit on March 29, 2023.

At 1:29 pm, City Union Bank was quoted 9% lower at Rs 126.60, while the S&P BSE Sensex rose 0.63%. As of the time of writing, the average over-the-counter volume on the NSE and BSE more than doubled, with a total of 16.4 million shares changing hands.

In Q4FY23, City Union’s operating performance was weaker, with loans up 7% YoY, deposits up 10% YoY, and net interest margin down 25 basis points QoQ.

The bank’s Net Interest Income (NII) growth slowed to 2.7% YoY and fell 7.5% QoQ to Rs 514 crore mainly due to a lower Net Interest Margin (NIM) to 3.65% (23 bps/36 bps QoQ) year-on-year).

Profit after tax was stable quarter-on-quarter and rose 4% year-on-year to Rs 219 crore on weak revenue and business growth. Asset quality improved, with the Gross Non-Performing Assets (GNPA) ratio improving 25 basis points quarter-over-quarter and 33 basis points year-on-year to 4.37%, driven by reduced slippage in the quarter. The total slippage in Q3FY23 was Rs 358 crore against Rs 439 crore.

Kotak Securities affirmed the “ADD” rating with a fair value of Rs 150 (unchanged).

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