Union bank

City Union Bank share price: Buy City Union Bank, price target Rs 200 : ICICI Securities

ICICI Securities has a call to buy on City Union Bank with a target price of Rs 200. The current market price of City Union Bank Ltd. is Rs 140. The period given by the analyst is one year when the price of City Union Bank Ltd. can achieve the set goal. .

City Union Bank Ltd., incorporated in 1904, is a banking company (having a market capitalization of Rs 10484.24 Crore).

Major products/revenue segments of City Union Bank Ltd. include interest and discounts on advances and bills, income from investments, interest on balances with RBI and other interbank funds and interest for the year ending March 31, 2021.


For the quarter ended 31-12-2021, the company reported total standalone revenue of Rs 1195.24 Crore, down -2.42% from last quarter, total revenue of Rs 1224.94 Crore and down -6.46% compared to the same quarter last year. Total income of Rs 1277.80 Crore. The bank reported a net profit after tax of Rs 196.12 Crore last quarter.

Investment rationale
City Union Bank’s (CUBK) Q3FY22 RoA was close to normal at around 1.4%. Slippages were at the lowest level of Rs2.7 billion (~2.0% of loans adjusted for Rs0.5 billion to 0.6 billion additional slippages due to RBI’s revised DPD standards), since the onset of covid . During the quarter, the bank launched a growth-oriented strategy. All of this suggests the disappearance of covid-related business uncertainties for CUBK. From now on, the bank is ready to embark on a new digital-driven growth journey. The steady improvement in SMA 1 and 2 books to 1.98%/2.1% in Q3FY22 from 2.79%/2.59% in Q2FY22, respectively (much lower than pre-covid levels), reflects the improved asset quality and reinforces the idea that the additional stress formation during EX23E would be in the guided range and lower than that of FY22E. While the total of restructured accounts (totalling Rs 22 billion) and the exposure of clients benefiting from the ECLGS (Rs 136 billion) remain high, the portfolio behavior of these pools remains satisfactory and management does not expect any formation of significant stressed assets in fiscal year 23E. Having successfully weathered the covid-related challenges, especially in its valuation range, CUBK is poised to pursue higher growth in this area.

Promoter/Fii Holdings
Promoters held 0 stake in the company as of December 31, 2021, while FIIs held 16.0%, DIIs 43.94%.

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