Buy City Union Bank, target price Rs 200: ICICI Securities
City Union Bank Ltd., incorporated in the year 1904, is a banking company (having a market cap of Rs 10484.24 Crore).
By ETMarkets.com | Updated:
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ICICI Securities has buy call on City Union Bank with a target price of Rs 200. The current market price of City Union Bank Ltd. is Rs 140. Time period given by analyst is one year when City Union Bank Ltd. price can reach defined target.
City Union Bank Ltd., incorporated in the year 1904, is a banking company (having a market cap of Rs 10484.24 Crore).
City Union Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-12-2021, the company reported a Standalone Total Income of Rs 1195.24 Crore, down -2.42 % from last quarter Total Income of Rs 1224.94 Crore and down -6.46 % from last year same quarter Total Income of Rs 1277.80 Crore. The bank reported net profit after tax of Rs 196.12 Crore in latest quarter.
Investment Rationale
City Union Bank’s (CUBK) Q3FY22 RoA was near-normal at ~1.4%. Slippages were at lowest level of Rs2.7bn (~2.0% of loans adjusted for Rs0.5bn-0.6bn additional slippages due to RBI’s revised DPD norms), since covid on-set. The quarter saw the bank kick-starting a growth-oriented strategy. All this suggests the fading-away of covid-related business uncertainties for CUBK. Hereon, the bank is ready to embark on a revamped digital-led growth journey. Steady improvement in SMA 1 & 2 books to 1.98% / 2.1% in Q3FY22 from 2.79% / 2.59% in Q2FY22, respectively (much lower than pre-covid levels), reflects improved asset quality and reinforces view that incremental stressed formation in FY23E would be within the guided range and lower than in FY22E. While total restructured accounts (totaling Rs22bn) and exposure for customers availing of ECLGS (Rs136bn) remains elevated, portfolio behavior from these pool remains satisfactory and management does not foresee material stressed asset formation in FY23E. After successfully navigating covid-led challenges, more significantly within its assessment range, CUBK is geared up for pursuing higher growth hereon.
Promoter/FII Holdings
Promoters held 0 stake in the company as of 31-Dec-2021, while FIIs owned 16.0 per cent, DIIs 43.94 per cent.
City Union Bank Ltd., incorporated in the year 1904, is a banking company (having a market cap of Rs 10484.24 Crore).
City Union Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-12-2021, the company reported a Standalone Total Income of Rs 1195.24 Crore, down -2.42 % from last quarter Total Income of Rs 1224.94 Crore and down -6.46 % from last year same quarter Total Income of Rs 1277.80 Crore. The bank reported net profit after tax of Rs 196.12 Crore in latest quarter.
Investment Rationale
City Union Bank’s (CUBK) Q3FY22 RoA was near-normal at ~1.4%. Slippages were at lowest level of Rs2.7bn (~2.0% of loans adjusted for Rs0.5bn-0.6bn additional slippages due to RBI’s revised DPD norms), since covid on-set. The quarter saw the bank kick-starting a growth-oriented strategy. All this suggests the fading-away of covid-related business uncertainties for CUBK. Hereon, the bank is ready to embark on a revamped digital-led growth journey. Steady improvement in SMA 1 & 2 books to 1.98% / 2.1% in Q3FY22 from 2.79% / 2.59% in Q2FY22, respectively (much lower than pre-covid levels), reflects improved asset quality and reinforces view that incremental stressed formation in FY23E would be within the guided range and lower than in FY22E. While total restructured accounts (totaling Rs22bn) and exposure for customers availing of ECLGS (Rs136bn) remains elevated, portfolio behavior from these pool remains satisfactory and management does not foresee material stressed asset formation in FY23E. After successfully navigating covid-led challenges, more significantly within its assessment range, CUBK is geared up for pursuing higher growth hereon.
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Promoter/FII Holdings
Promoters held 0 stake in the company as of 31-Dec-2021, while FIIs owned 16.0 per cent, DIIs 43.94 per cent.
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