City Union Bank

This small Tamil Nadu based bank posted a good set of numbers for Q3Fy15. Net profit rose 15% (QoQ) at Rs.103 crore while operating profit has risen by a healthy 25% at Rs.168 crore. Deposits rose 10% at Rs.23,203 crore and advances were up 7% at Rs.15,825 crore.

The net profit would have been much higher but for the full provisioning it made for taxation at Rs.38.50 crore v/s Rs.16.50 crore in previous Q3. Provisioning towards NPAs rose 27%. The bank stated that this third quarter was significant as it recorded Rs. 100 crore profit in a quarter for the first time in its history while it crossed the Rs. 40,000 crore mark in respect of total business. Total income rose 11% at Rs.782 crore while non-interest income was up 66% at Rs.98 crore. NII was up 6% at Rs.210 crore and NIM was at 3.48%.

In terms of asset quality,  Gross NPA was up marginally from 2% to 2.12% (QoQ) and Net NPA was up from 1.3% to 1.31%. The bank stated that the recovery lagged a bit due to slowdown in realty sector. The Bank’s exposure to Spicejet stands at Rs.100 crore but has enough collateral and till date, has no overdues. The Bank had taken a conscious decision in 2007-8 to stop lending to big companies but due to Sun group’s closeness to the Bank, it agreed to lend to Spicejet.