Are City Union Bank latest results good or bad?

City Union Bank's latest financial results for Q2 FY26 reflect a continuation of its operational momentum, characterized by consistent growth in net profit and improvements in asset quality metrics. The bank reported a net profit of ₹305.92 crores, which represents a sequential increase of 7.41% from the previous quarter. This marks the seventh consecutive quarter of profitability growth, indicating a stable earnings trajectory.
The total income for the quarter expanded to ₹1,849.20 crores, driven by a notable increase in interest earned, which rose to ₹1,605.33 crores. This growth, however, was at a slower pace compared to the previous quarter, suggesting a potential moderation in revenue growth dynamics. The bank's net interest income also showed a positive trend, reaching ₹625.29 crores, although it faced challenges with net interest margin remaining stable at 3.54%, reflecting competitive pressures in the lending environment.

A key highlight from the results is the improvement in asset quality, with the gross non-performing assets (NPA) ratio declining to 2.99%, down from 3.88% a year earlier. This improvement underscores the bank's disciplined underwriting standards and effective credit risk management strategies. The net NPA ratio also improved to 1.20%, indicating robust provisioning coverage and collection efficiency.

The bank's capital adequacy ratio stood strong at 23.10%, providing a solid foundation for future growth. Additionally, the deposit base grew significantly, reflecting a stable funding profile that supports ongoing lending activities.

Overall, City Union Bank's results indicate a solid operational performance with a focus on maintaining asset quality while navigating a challenging macroeconomic landscape. The company saw an adjustment in its evaluation, reflecting the market's response to its financial performance and operational trends.