Moneycontrol
Feb 15, 2017 03:05 PM IST | Source: Moneycontrol.com

Hold City Union Bank; target of Rs 145: Centrum

Centrum recommended hold rating on City Union Bank with a target price of Rs 145 in its research report dated February 08, 2017.

Hold City Union Bank; target of Rs 145: Centrum


Centrum's research report on City Union Bank


CUBK's Q3FY17 NII at Rs3.1bn (+21.4% YoY) was led by 12.5% YoY growth in loans and further expansion in NIM to 4.18% (+36bps YoY). Operating expenses grew 18% YoY following 27% YoY growth in employee expenses. However, on back of strong treasury gains, operating profit at Rs2.7bn grew 32% YoY.


Outlook


We retain Hold on City Union Bank (CUBK), with TP at Rs145. The bank’s Q3’17 profitability was in-line with our estimates. Management has retained its slippage guidance for FY17E, as asset quality remains resilient with QoQ drop in delinquencies. CUBK’s capital position remains strong and with it levers in place will see growth rate accelerates.

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