City Union Bank's Financial Results Show Positive Performance in Q2 FY25

City Union Bank, a midcap private bank, has recently announced its financial results for the quarter ended September 2024. The bank has shown positive performance in this quarter, with its score improving from 5 to 6 in the last 3 months.

One of the key factors contributing to this positive performance is the bank’s low gross non-performing assets (NPA) ratio, which has been consistently falling in the last five quarters. This indicates that the proportion of stressed loans given by the bank is decreasing. Additionally, the bank’s interest earned has also been on a steady rise in the last five quarters, showing a positive trend in its sales.

Moreover, City Union Bank’s net NPA ratio has also been decreasing each quarter, further highlighting the bank’s efforts in managing its stressed loans. The bank’s net interest income, which is the income from its core business, has also been increasing in the last five quarters.

In terms of profitability, the bank has shown a positive trend in its profit after tax (PAT) in the last five quarters, with the highest PAT of Rs 285.18 crore in the September 2024 quarter. This has also resulted in an increase in the earnings per share (EPS) for shareholders.

However, there are some areas that the bank needs to work on, as seen in its operating cash flow, which has been falling each year in the last three years. Additionally, the profit before tax (PBT) has also fallen in the September 2024 quarter compared to the average PBT of the previous four quarters. The bank’s high non-operating income, which is 63.19% of its PBT, may not be a sustainable business model.

Overall, City Union Bank has shown positive financial performance in the September 2024 quarter, with some areas that need improvement. MarketsMOJO has given a ‘Hold’ call for the bank’s stock, indicating a neutral stance for investors.