City Union Bank

This small bank has done relatively well for Q2, posting a 5% rise in net profit at Rs.84 crore but this was thanks to the MAT write back of Rs.32 crore but for which, the profit would have come much lower. Its PBT came in at Rs.53 crore, down 47% (YoY) and down 62% (QoQ). NII came in at Rs.190 crore, up 27% (YoY). In terms of revenue breakup. Corporate banking fell 14% but treasury rose 29% and retail banking, its main forte, rose 31%.

But in terms of asset quality, there has been a deterioration. Gross NPA was at 1.66%, up 42 bps on sequential basis and up 43 bps YoY. Net NPA also rose to 0.83%, up 23 bps on YoY and up 20 bps on QoQ. Another worrying aspect is that provision for contingencies was sharply up at 88 crore, a whopping 330% surge QoQ and 216% up on YoY. Provision coverage ratio was at 70% of coverage ratio. CAR for the quarter (Basel III) norms stood at 14.28% v/s 13.12% (Q0Q). With small banks currently on the radar of traders on hopes of takeover by foreign banks, this small bank is also considered to be a prime target. The bank has set itself the target of hitting Rs.30,000 crore in advances by Fy16.