City Union Bank Limited has hosted the audio recording of its earnings call to discuss standalone un-audited financial results for the first quarter of FY27. The event took place on July 28, 2026, covering the quarter ended June 30, 2026. This disclosure ensures transparency for investors regarding the bank's recent financial performance and strategic outlook.

Earnings Call Overview

The conference call was organized by Ambit Capital, with Jignesh Shial from Institutional Equities serving as the moderator. Senior management from City Union Bank, including the Managing Director & CEO, Executive Director, and Chief Financial Officer, participated in the session. The discussion provided insights into the quarterly results and future plans for the bank.

Access Information

The audio recording of the earnings call is now available on the bank's official website. Investors can access the recording via the weblink provided in the regulatory filing. Previously, participants could join via teleconference using primary and international toll-free numbers. The DiamondPass feature was recommended to avoid wait times during the live session.

Regulatory Compliance

The disclosure was made pursuant to Regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The filing was signed by Venkataramanan S, Company Secretary & Compliance Officer, on July 28, 2026. The bank has disseminated this information to the National Stock Exchange of India Limited and BSE Ltd.

City Union Bank reported a net profit of ₹383 crore for the quarter ended June 30, 2026, marking a 25% year-on-year increase from ₹306 crore in Q1FY26. The profitability gain was driven by a 31% surge in net interest income (NII) to ₹820 crore, supported by robust growth in advances and deposits while maintaining a stable net interest margin (NIM) of 3.78%. This performance coincides with significant asset quality improvements, as gross non-performing assets (NPAs) fell to 1.73% from 2.99% a year ago, reducing provisioning pressures despite higher absolute provisions.

The Board of Directors approved the unaudited standalone financial results on July 28, 2026, in compliance with Regulation 30 and Schedule III Part A of the SEBI Listing Regulations, 2015. The results were subjected to a limited review by the Joint Statutory Central Auditors, P.B. Vijayaraghavan & Co and M. Srinivasan & Associates. The bank also disclosed that it has discontinued the maintenance of the Investment Fluctuation Reserve (IFR) following RBI circulars, transferring the existing amount to the General Reserve during the quarter.

Financial Performance Highlights

Interest income rose 24% to ₹1,985 crore, reflecting higher yields on advances and investments. Non-interest income remained flat at ₹244 crore. Operating expenses grew by 16% to ₹483 crore, lagging behind revenue growth and contributing to a decline in the cost-to-income ratio from 48.12% to 45.42%. Provisions increased to ₹198 crore from ₹145 crore in the prior year period.

Asset Quality and Balance Sheet Growth

The bank’s asset quality showed marked improvement during the quarter. Gross NPAs declined to ₹1,170 crore (1.73% of advances) from ₹1,617 crore (2.99%) in Q1FY26. Net NPAs reduced to ₹405 crore (0.61%) from ₹635 crore (1.20%). The provision coverage ratio stood at 85% including technical write-offs and 65% excluding them.

Balance sheet growth was robust, with total business rising 23% to ₹1,46,987 crore. Deposits increased by 21% to ₹79,342 crore, while advances grew by 25% to ₹67,645 crore. The current account savings account (CASA) ratio improved, with CASA balances reaching ₹21,094 crore, up 18% from ₹17,954 crore. The cost of deposits decreased to 5.56% from 5.95%, aiding margin stability.

What the Numbers Show

The divergence between the 31% rise in net interest income and the 21% increase in total income highlights the primary driver of profitability: core lending activities rather than fee-based services. While non-interest income remained stagnant at ₹244 crore, the expansion in NII was fueled by a 25% growth in advances outpacing deposit growth of 21%, leading to an average credit-deposit ratio of 86%. Furthermore, the reduction in gross NPA ratios from 2.99% to 1.73% alongside a stable NIM of 3.78% indicates genuine asset quality improvement rather than just provisioning strategies. The decline in cost of deposits to 5.56% from 5.95% demonstrates effective liability management, allowing the bank to maintain yield on advances at 9.79% without compressing margins significantly.