Check Before You Invest : City Union Bank Ltd

BSE: 532210 NSE: CUB ISIN: INE491A01021

| Sector: BFSI | Industry: Bank - Private

Snapshot

Q.1 Which industry/sub-sector does City Union Bank Ltd belong to?

City Union Bank Ltd belongs to the BFSI sector, operating specifically within the Bank - Private segment.

Q.2 Is City Union Bank Ltd a good quality company?

City Union Bank Ltd is a weak quality company, based on a inconsistent 10-year financial track record.

Q.3 Is City Union Bank Ltd undervalued or overvalued?

City Union Bank Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Q.4 Is City Union Bank Ltd a good buy now?

City Union Bank Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of City Union Bank Ltd?

City Union Bank Ltd Total Income growth is 11.97% for FY-2025, which is above its 5-year CAGR of 6.78%, indicating faster growth.

Q.2 Return on Assets of City Union Bank Ltd?

City Union Bank Ltd Return on Asset is 1.5%, which is in line with its 5-year historical median of 1.5%, indicating stable earnings on assets.

	Current Level	5-year Historic Median
NIM%	3.1	3.23
PPOP%	10.68	8.73
RoA%	1.5	1.5

Q.3 Return on Equity (ROE) of City Union Bank Ltd?

City Union Bank Ltd Return on Equity is 12.6% for FY-2025, which is in line with its 5-year historical median of 12.6%, indicating the business is making similar use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of City Union Bank Ltd?

City Union Bank Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 10.68% for FY-2025, which is above its 5-year median(8.73%), indicating increasing margins.

Q.5 Net Interest Margin of City Union Bank Ltd?

City Union Bank Ltd Net Interest Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 3.1% for FY-2025, which is below its 5-year median( 3.23%), indicating decreasing margins.

Q.6 Total Asset growth of City Union Bank Ltd?

City Union Bank Ltd Total Asset growth is 9.6% for FY-2025, which is above its 5-year CAGR of 9.31%, indicating faster growth.

Q.7 Cost to Income ratio of City Union Bank Ltd?

City Union Bank Ltd Cost to Income ratio which represents the cost incurred for every Rs.100 earned is 47.8% for FY-2025, is higher its historical 5-year median of 41.7%, indicating improved cost management.

Q.8 Capital Adequacy ratio of City Union Bank Ltd?

City Union Bank Ltd Capital Adequacy ratio (CAR) is 23.8% for FY-2025, which is above the regulatory requirement of 12%, indicating strong capital position.

Q.9 Asset Quality of City Union Bank Ltd?

City Union Bank Ltd Gross Non-Performing Assets, which are loans overdue by more than 90 days, is 3.09% for FY-2025, which is below its 5-year median 4.37%, while Net Non-Performing Assets, which is GNPA minus provisions made for bad loans is 1.25% which is below its 5-year median( 2.36%), indicating improving asset quality.

Ownership & governance

Q.1 Promoter shareholding and pledge status of City Union Bank Ltd?

Promoters hold 0.00% of the City Union Bank Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of City Union Bank Ltd vs Industry Peers?

City Union Bank Ltd AUM CAGR is 9.31%, compared to the 5-year industry median CAGR of 12.74%, indicating slower growth and losing its market share.

Q.2 Profit metrics (NIM, PPOP, RoA) of City Union Bank Ltd vs industry peers

City Union Bank Ltd profit metrics are in line with the industry median level of 7.71%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NIM%	3.1	3.71
PPOP%	10.68	18.38
RoA%	1.5	1.05

Q.3 Operating efficiency of City Union Bank Ltd vs industry peers?

City Union Bank Ltd Cost to Income (41.3) is below the industry median of (61.45); while the current ROE (12.6) are above than the 5-year average Industry ROE (12.3). This shows that the business is positioned in the middle quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NIM%	3.1	3.71
PPOP%	10.68	18.38
RoA%	1.5	1.05
Cost to Income%	47.8	61.45
ROE%	12.6	12.3

Valuation & price assessment

Q.1 Stock return of City Union Bank Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 13.3% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	13.3%	10.2%	23.7%	55.6%

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	15.13	13.05	13.38
Price to Book	1.9	1.51	1.37
Price to Sales	2.92	2.43	1.77
EV to EBITDA	9.11	8.21	7.70

Q.4 Valuation ratios of City Union Bank Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 1.9% is higher than its historical median of 1.51%, indicating that at the current price the stock is overvalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

City Union Bank Ltd return on invested capital (ROIC) is 28.97% for FY-2025, is higher than its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

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