Accumulate City Union Bank; target of Rs 159: Geojit

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26 Aug, 2025 12:21

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City Union Bank Ltd. (CUB), the oldest private sector bank in India, is a mid-sized commercial bank headquartered in Tamil Nadu, with a network of 752 branches spread across the country and a loan book size of Rs.43,009cr . Business growth was subdued compared to industrial growth, with advances and deposits growing flat sequentially. The bank has been focusing on low yield gold loan disbursement and as a result, the portfolio grew by 31% YoY, constituting 25% of the total loan book. Yield on advances declined 23bps sequentially to 9.16% and as a result, NIM contracted 21bps sequentially to 3.88%. Due to the impact of NPA divergence, net profit declined 21% QoQ. Asset quality took a hit due to higher slippages. GNPA/NNPA stands at 4.62%/2.61%, against 4.36%/2.61% during Q2FY23.

We recommend Accumulate rating on the stock based on 1.35x Adj BVPS of FY25E with a target price of Rs. 159 . .

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