City Union Bank's Q3 Financial Results Show Mixed Performance, Stock Call 'Hold'

City Union Bank, a midcap private bank, recently declared its financial results for the quarter ended December 2023. According to MarketsMOJO, the stock call for the bank is 'Hold'. The bank's financial performance for the quarter has remained flat, with a score of -5 compared to -4 in the previous 3 months.

However, there are some positive aspects to City Union Bank's financials for the quarter. The bank has shown a consistent growth in interest earned, with the highest amount of Rs 1,326.24 crore and a growth in each quarter for the past five quarters. The near term sales trend is also positive. The bank's Profit Before Tax less Other Income (PBT) for the quarter is at Rs 125.15 crore, showing a growth of 51.3% compared to the average PBT of the previous four quarters. The near term trend for PBT is also positive. Additionally, the bank's Net NPA for the quarter is at its lowest in the past five quarters, indicating a decrease in the proportion of stressed loans given by the bank. The bank's cash and cash equivalents for the half yearly period is also at its highest at Rs 3,392.09 crore, showing an improvement in short term liquidity.

On the other hand, there are some areas where City Union Bank's financials for the quarter have not performed well. The bank's Operating Profit Margin for the quarter is at its lowest at 12.90% and has fallen in each of the past five quarters, indicating a deterioration in the bank's efficiency. The Operating Profit (PBDIT) for the quarter is also at its lowest in the past five quarters at Rs 171.15 crore. The near term trend for Operating Profit is negative. Moreover, the Non Operating Income for the quarter is 60.65% of the Profit Before Tax (PBT), which is a high proportion. This indicates that the bank's income from non-business activities is high, which may not be a sustainable business model.

Overall, City Union Bank's financial results for the quarter ended December 2023 show a mix of positive and negative aspects. Investors are advised to hold their position in the stock and keep a close watch on the bank's performance in the coming quarters.