City Union Bank (CUB) has reported its highest-ever quarterly profit after tax (PAT) of ₹306.00 crores, marking a significant milestone in the bank's history. This achievement represents the first time the bank has crossed the ₹300.00 crore mark in quarterly profits.

Strong Operational Performance

The bank demonstrated robust operational performance with a 16% year-on-year credit growth, the highest June-to-June growth in recent years. Advances increased from ₹46,548.00 crores to ₹54,020.00 crores, while deposits grew by 20% to reach ₹65,734.00 crores compared to ₹54,857.00 crores in the previous year.

Improved Asset Quality

CUB's asset quality showed significant improvement:

• Gross Non-Performing Assets (GNPA) reduced to 2.99% from 3.88% year-on-year
• Net Non-Performing Assets (NNPA) decreased to 1.20% from 1.87%
• Provision Coverage Ratio (PCR) without technical write-off improved to 61% from 53% last year

Key Financial Metrics

• Net Interest Margin (NIM) maintained at 3.54%
• Operating profit increased by 21% to ₹451.00 crores
• Return on Assets (ROA) stood at 1.55%

Sector-wise Performance

The bank's MSME sector, which forms a significant part of its portfolio, showed resilience with no unusual stress patterns observed. The management expressed confidence in maintaining mid-teen growth rates and stable asset quality metrics.

Outlook

City Union Bank's management remains optimistic about maintaining the growth momentum and profitability in the coming quarters. They expect to sustain a NIM of around 3.50% for the full year, despite recent repo rate cuts.

R. Vijay Anandh, Executive Director of City Union Bank, stated, "We are very happy to share that for the first time in our history, we have crossed ₹300 crores PAT. Our deposit growth is back on track and aligning with the credit growth."

The bank plans to continue its branch expansion strategy, aiming to add 75-80 branches in the current fiscal year.

Challenges and Opportunities

While the bank remains cautious about potential headwinds, including the recent US tariff announcements affecting the textile industry, the management believes the impact will be limited. They are closely monitoring the situation and diversifying their export-oriented customer base.

In conclusion, City Union Bank's record-breaking performance demonstrates its strong fundamentals and ability to capitalize on growth opportunities in the evolving banking landscape.

City Union Bank (CUB) has unveiled its strategic growth plans for the fiscal year 2026, setting an ambitious credit growth target of 12-14%. The bank's focus will be primarily on expanding its presence in the Micro, Small, and Medium Enterprises (MSME) and retail segments.

Strategic Focus on MSME and Retail

CUB's decision to concentrate on MSME and retail segments aligns with the bank's historical strengths and the current market opportunities. This targeted approach is expected to drive sustainable growth while managing risk effectively.

Technology-Driven NPA Reduction

In addition to its growth strategy, CUB has announced plans to reduce non-performing assets (NPAs) through the implementation of advanced technology. The bank will be focusing on two key areas:

1. Enhanced Collections: CUB plans to leverage technology to improve its collection processes, potentially through the use of data analytics and automated reminders.

2. Improved Credit Monitoring Systems: The bank aims to strengthen its credit monitoring capabilities, likely involving real-time tracking of loan performance and early warning systems for potential defaults.

Q1 FY26 Financial Performance

CUB's focus on growth is supported by its strong performance in the first quarter of FY26. Key highlights include:

Capital Adequacy and Future Outlook

With a strong capital adequacy ratio of 23.10% under Basel III norms, CUB is well-positioned to support its growth ambitions. The bank's focus on technology-driven processes for NPA reduction, coupled with its strategic emphasis on MSME and retail segments, sets a positive tone for achieving its credit growth targets in FY26.

As CUB moves forward with its growth strategy, the banking sector will be watching closely to see how effectively the bank can balance its expansion plans with maintaining asset quality in the dynamic economic environment.