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Synopsis: City Union Bank's shares jumped by 9.29%, reaching a 52-week high following the announcement of strong Q1 FY25 results, including a 16% YoY profit increase and improved asset quality.
The surge in share price follows the bank's announcement of a strong financial performance in Q1 FY25. The private lender reported a 16% year-on-year (YoY) increase in its profit after tax (PAT), which amounted to Rs 264 crore, up from Rs 227 crore in the corresponding quarter of the previous year.
Net interest income (NII), the difference between the interest income generated by the bank and the amount of interest paid to its depositors, rose by 4.5% to Rs 546 crore compared to Rs 522.6 crore in Q1 FY24. Additionally, the bank's asset quality showed improvement, with the gross non-performing asset (GNPA) ratio falling to 3.88% from 4.91% and net NPA reducing to 1.87% from 2.51%.
The bank's return on assets (RoA) increased to 1.51% YoY from 1.40%. The total business grew by 8% to Rs 1,01,405 crore, with deposits rising by 6% to Rs 54,857 crore and advances by 10% to Rs 46,548 crore. The current and savings account (CASA) deposits saw a 2% growth, reaching Rs 16,195 crore.
As of June 30, 2024, CUB’s capital adequacy ratio under the Basel III norms stood at 23.58%, with Tier-1 capital adequacy at 22.55%, both significantly above the regulatory requirements. This robust performance led to high trading volumes, with around 6.73 lakh shares traded, significantly above the two-week average of 1.57 lakh shares? (MarketScreener)?? (ICICI Direct)?.
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