City Union Bank Limited · NSE:CUB
City Union Bank — Investor Presentation (May 2023)
50 slides from City Union Bank's investor presentation, May 26, 2023
Slide 1: VENKATARAM ANAN SRINIVASAN
VENKATARAM Digitally signed by VENKATARAMANAN SRINIVASAN DN: c=IN, o=Personal, title=5777, pseudonym=133208440338765970024H2BB8u4uPYr , ANAN 2.5.4.20=fc104d222020bf66b1514bc8475a34b7b1d5 b881826da39511954b62cde4acb2, postalCode=612001, st=Tamil Nadu, serialNumber=635992fe15d4790aeca23b493690247 SRIN
Slide 2: March 2023
City UNION BANK
Slide 3: Disclaimer
Disclaimer No representation or warranty, express or implied is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information contained in this presentation is only current as of its date. Certain
Slide 4: Table of Contents
TABLE OF CONTENTS 4 10 14 Overview Performance Highlights – Financial Performance & March 2023 Business Profile 38 42 44 46 Digital Initiatives Branch Network Shareholding Pattern Corporate Governance 3
Slide 5: Overview
OVERVIEW 4
Slide 6: Overview Facts & Figures
OVERVIEW City Union Bank Ltd., the oldest Private Sector Bank in India, was founded on October 31, 1904 and is headquartered at Kumbakonam,Tamil Nadu, India. The main focus of the Bank – lending to MSME, Retail / WholesaleTrade Wholesale with granular asset profile including providing short term and
Slide 7: Key Milestones
KEY MILESTONES Rights Issue @ 1 : 4- Bonus Issue @ Amalgamation of ‘TheCity Entered into Preferential allotment to reward the existing 1 : 10 - Forward Bank Limited’ & agreement withTCS TCS for equity shares shareholders & employees rewarded Scheduled bank since ‘The Union Bank Limited’ for core ban
Slide 8: A Specialized Banking Model Aligned to Target Segment – SME / MSME
CITY UNION BANK - A SPECIALIZED BANKING MODEL ALIGNED TO TARGET SEGMENT – SME / MSME SME / MSME Prudent Risk Invested in Purely retail focus Management Robust Infrastructure Liability Franchise SME/MSME specialized SME exposures’ result in Comprehensive No Certificate of Deposit business model focus
Slide 9: Competitive Advantages
COMPETITIVE ADVANTAGES NETWORK STRONG TRACK RECORD Pan India presence with 752branches Continuous profitability and dividend payout in all Strong presence in South India (669 branches) 118+ years of operations of which 519 are in Tamil Nadu alone Business growth of 15%+ CAGR in last 10 years ROBUST
Slide 10: Credit Rating
CREDIT RATING ICRA has assigned “AA-” for Long Term - issuers with this rating are considered to have “High Degree of Safety” regarding timely servicing of financial obligations. “A1+-” for Certificate of Deposits (CD) - issuers with this rating are considered to have “Strong Degree of Safety” regar
Slide 11: Performance Highlights – March 2023
PERFORMANCE HIGHLIGHTS – MARCH 2023 10
Slide 12: Q4 FY23 / FY 22-23 Performance – A Snapshot
Q4 FY 23 / FY 22-23 PERFORMANCE – A SNAPSHOT Deposits increased by 10% from Rs.477 Bn to Rs.524 Bn Y-o-Y Y Advances registered a growth of 7% from Rs.411 Bn to Rs.440 Bn Y-o-Y Total business grown by 8% from Rs.888 Bn to Rs.964 Bn Y-o-Y Gross Profit increased by 14% from Rs.15,953 Mn to Rs.18,180 Mn
Slide 13: Q4 FY23 vs Q4 FY22 Performance – A Snapshot
Q4 FY 23 VS Q4 FY 22 PERFORMANCE – A SNAPSHOT (in INR Mn) 523,979 439,708 963,687 156,569 10% 7% 8% 1% 476,897 411,560 888,457 155,294 Deposits Advances Total Business CASA 4,170 2,180 5,143 41.20% 4% 3% % 4,398 2,089 5,007 37.49 % Gross Profit Net Profit Net Interest Cost to Income Income 1.33% 12.
Slide 14: FY23 vs FY22 Performance – A Snapshot
FY 23 VS FY 22 PERFORMANCE – A SNAPSHOT (in INR Mn) 523,979 439,708 963,687 156,569 10% 7% 8% 1% 476,897 411,560 888,457 155,294 Deposits Advances Total Business CASA 18,180 9,375 21,628 38.85% 14% 23% 13% % 15,953 7,602 19,165 40.37 % Gross Profit Net Profit Net Interest Cost to Income Income 1.46%
Slide 15: Financial Performance & Business Profile
FINANCIAL PERFORMANCE & BUSINESS PROFILE 14
Slide 16: FY23 vs FY22 Performance – A Snapshot
FY 23 VS FY 22 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS FY 2023 FY 2022 INC / (DEC) Growth Growth % Q3 FY 23 Deposits 523,979 476,897 47,082 10% 499,974 Advances 439,708 411,560 28,148 7% 430,087 Total Business 963,687 888,457 75,230 8% 930,061 Demand Deposits 47,637 46
Slide 17: Q4 FY23 vs Q4 FY22 Performance
Q4 FY 23 VS Q4 FY 22 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q4 FY 23 Q4 FY 22 INC / (DEC) Growth % Q3 FY 23 Net Interest Income 5,143 5,007 136 3% 5,557 Other Income 1,950 2,029 -79 -4% 2,243 Operating Expenses 2,923 2,638 285 11% 2,827 Gross Profit 4,170 4,398 -228 -
Slide 18: FY23 vs FY22 Performance
FY 23 VS FY 22 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS FY 23 FY 22 INC / (DEC) Growth % Net Interest Income 21,628 19,165 2,463 13% Other Income 8,104 7,591 513 7% Operating Expenses 11,552 10,803 749 7% Gross Profit 18,180 15,953 2,227 14% Provisions & Contingencies 8
Slide 19: Provisions & Contingencies – Breakup
PROVISIONS & CONTINGENCIES – BREAKUP (in INR Mn) PARTICULARS Q4 FY 23 Q4 FY 22 FY 22-23 FY 21-22 Provision for: - Tax 400 600 2,400 2,250 - Bad Debts 1,750 1,150 6,900 5,535 - Contingency / Covid 19 - 450 -130 - 80 - Standard Assets -50 100 -200 550 - Restructuring / FITL -120 - -120 107 - Others 10
Slide 20: Q4 FY23 vs Q4 FY22 – Income and Expenses Breakup
Q4 FY 23 VS Q4 FY 22 – INCOME AND EXPENSES BREAKUP (in INR Mn) INTEREST INCOME BREAKUP INTEREST EXPENSES BREAKUP Q4 FY Q4 FY Q4 FY Q4 FY PARTICULARS Growth % PARTICULARS Growth % 23 22 23 22 Interest on Loans 9,743 8,702 12% Int Exp on Deposits 6,351 5,153 23% Interest on Investments 2,155 1,745 23%
Slide 21: FY23 vs FY22 – Income and Expenses Breakup
FY 23 VS FY 22 – INCOME AND EXPENSES BREAKUP (in INR Mn) INTEREST INCOME BREAKUP INTEREST EXPENSES BREAKUP FY FY FY FY PARTICULARS Growth % PARTICULARS Growth % 2023 2022 2023 2022 Interest on Loans 38,009 34,540 10% Int Exp on Deposits 22,805 21,197 8% Interest on Investments 8,351 6,305 32% Other
Slide 22: Deposits and Advances Growth – Over the Years
DEPOSITS AND ADVANCES GROWTH – OVER THE YEARS (in INR Mn) DEPOSITS ADVANCES 5,23,979 4,39,708 4,76,897 4,11,560 4,45,370 3,70,206 3,84,480 4,08,325 3,30,652 3,45,762 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-MAR-2022 31-MAR-2023 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-MAR-2022 31-MAR-2023 BUSINESS CASA
Slide 23: Income Growth Over the Years
INCOME GROWTH OVER THE YEARS… (in INR Mn) NET INTEREST INCOME GROWTH OTHER INCOME GROWTH 8,104 21,628 7,591 19,165 6,799 6,887 18,297 16,115 16,752 5,144 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-MAR-2022 31-MAR-2023 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-MAR-2022 31-MAR-2023 CEB GROWTH NET PROFIT GROW
Slide 24: Key Business Indicators
KEY BUSINESS INDICATORS PARTICULARS Q4 FY 23 Q4 FY 22 FY 22-23 FY 21-22 Cost of Deposits 5.07% 4.54% 4.66% 4.68% Yield on Advances 9.31% 9.26% 9.23% 9.36% Yield on Investments 5.97% 5.70% 5.89% 5.71% Net Interest Margin 3.65% 4.01% 3.89% 3.98% Cost to Income 41.20% 37.49% 38.85% 40.37% Cost of Funds
Slide 25: Key Business Ratios – Yearly Trends
KEY BUSINESS RATIOS – YEARLY TRENDS NET INTEREST MARGIN RETURN ON ASSETS 5.00% 1.70% 1.64% 1.60% 1.46% 4.50% 4.32% 1.50% 1.40% 1.35% 3.98% 4.00% 3.98% 3.89% 4.00% 1.30% 1.20% 1.15% 3.50% 1.10% 1.00% 1.00% 3.00% 0.90% 31-MAR-19 31-MAR-20 31-MAR-21 31-MAR-22 31-MAR-23 31-MAR-19 31-MAR-20 31-MAR-21 31-
Slide 26: Cost of Deposits & Yield on Advances
COST OF DEPOSITS & YIELD ON ADVANCES (in %) 16 14 13.49 13.43 13.18 12.83 12.10 12 11.46 10.95 10.76 9.91 10 9.36 9.23 8.44 8.37 8.15 7.62 8 6.82 6.29 6.17 6.20 6 5.36 4.68 4.66 4 2 0 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 22 Mar 23 Spread between cost of deposits and yie
Slide 27: Efficiency
EFFICIENCY COST INCOME RATIO (%) CASA RATIO (%) 42.47 32.56 42.12 29.15 29.88 41.72 25.22 24.97 40.37 38.85 31-Mar-2019 31-Mar-2020 31-Mar-2021 31-Mar-2022 31-Mar-2023 31-Mar-2019 31-Mar-2020 31-Mar-2021 31-Mar-2022 31-Mar-2023 BUSINESS PER EMPLOYEE PROFIT PER EMPLOYEE (in INR Mn) (in INR Mn) 165.45
Slide 28: Loan Book – Products Composition
LOAN BOOK – PRODUCTS COMPOSITION % toTotal Advances 1% Working capital loans yielding higher interest constitute 64% of advances Bills Purchased & Bills Discounted Term Loan 35% Cash Credit & Re-pricing possible at short intervals Demand Loan thus reducing interest rate risk 64% Loan Book Products C
Slide 29: Loan Book Sectoral Deployment – Position as on 31.03.2023
LOAN BOOK SECTORAL DEPLOYMENT – POSITION AS ON 31.03.2023 (in INR Mn) Loans collateralized by Deposits 6,594 Large Industries NBFC Retail traders 6,687 4,889 7,941 Personal Loans 1% Infrastructure 9,473 2% 2% 3,198 Wholesale Traders 2% 15,694 4% Others 19,378 4% Housing Loan 5% 43% 20,714 SECTORAL M
Slide 30: Loan Book Sectoral Deployment – Secured & Unsecured Advances
LOAN N BOOK SECTORAL DEPLOYMENT – POSITION AS ON 31.03.2023 (in INR Mn) SECURED & UNSECURED ADVANCES Particulars Amount (INR Mn) (%) Secured Loans 437,304 99% Unsecured Loans 2,404 1% Total 439,708 100% Trading & MSME loans constitute about 50% Diversified credit portfolio reduces credit risk and Lo
Slide 31: Loan Book – Advances to Major Industries
Corporate Governance Loan Book – Advances to Major Industries (i n I N R M n Advances to Major Industries 31st March 2023 TEXTILE a) Cotton 19,918(5%) b) Other Textiles 26,574 26,574(6%) METALS a) Iron & Steel 10,647(2%) Amount % to Total Industry Name b) Other Metals 9,036(2%) (in INR Mn) Advances
Slide 32: Loan Book – Driver to Growth – Q4 FY23
LOAN BOOK - DRIVER TO GROWTH – Q4 FY 23 During the last few quarters, we have given more thrust to Gold Loans which is increased by 22% from Rs.90,033 Mn in Q4 FY 22 to Rs.110,272 Mn in Q4 FY 23. Also, the % of Gold Loans portfolio to Gross Advances improved to 25% (in INR Mn) GOLD LOAN PORTFOLIO
Slide 33: Asset Quality
ASSET QUALITY (in INR Mn) GROSS NPA QTM & GROSS NPA % NET NPA QTM & NET NPA % 18,932 19,332 19,202 11,911 10,752 10,176 14,134 5.11% 7,785 9,771 4.70% 5,915 4.37% 4.09% 2.97% 2.95% 2.29% 2.36% 1.81% 2.95% 31-Mar-19 31-Mar-20 31-Mar-21 31-Mar-22 31-Mar-23 31-Mar-19 31-Mar-20 31-Mar-21 31-Mar-22 31-Ma
Slide 34: Asset Quality Position – Movement Over the Years
ASSET QUALITY POSITION – MOVEMENT OVER THE YEARS (In INR MN) FY MAR-18 FY MAR-19 MAR FY MAR-20 FY MAR-21 FY MAR-22 Q4 FY 23 FY MAR-23 NPA Opening balance 6,820 8,565 9,771 14,134 18,932 19,887 19,332 Additions A 5,749 6,322 11,104 11,131 12,757 3,582 13,290 Recovery made 1,623 1,980 1,644 1,950 4,42
Slide 35: Asset Quality – Gold Loan Portfolio
ASSET QUALITY – GOLD LOAN PORTFOLIO (In INR MN) No. of A/cs Balance Gold Loan –Total 823,282 110,272 Of which, - Standard Accounts 821,947 110,088 - N PA 1,335 184 Gross NPA 19,202 % of Gold Loan NPA to Gold Loan Portfolio 0.16% % of Gold Loan NPA to Gross NPA 0.95% 34
Slide 36: Restructured Accounts
RESTRUCTURED ACCOUNTS Quarterwise balance outstanding in respect of Restructured Standard borrowers (In INR Mn) Sep-21 Mar-22 Sep-22 Dec-22 Mar-23 Type of Restructuring No. of No. of No. of No. of No. of Amt Amt Amt Amt Amt Borrowers Borrowers Borrowers Borrowers Borrowers MSME 333 15,398 395 15,032
Slide 37: Security Receipts
SECURITY RECEIPTS Balance outstanding of Security Receipts wrt NPA sold to ARC Period ended Amount (in INR Mn) Mar-20 2474 Mar-21 1429 Mar-22 917 Jun-22 819 Sep-22 804 Dec-22 12 Mar-23 12 In the FY 13-14 & 14-15, we had sold some of the NPA accounts to ARC on SR basis to the tune of Rs.3,747 Mn. W
Slide 38: Investments – At a Glance
INVESTMENTS – AT AGLANCE Investments Breakup and Categorywise (in INR Mn) Particulars MAR 2023 MAR 2022 SLR Securities 142,678 121,365 Non-SLR Securities 924 1,578 Total Investments 143,602 122,943 Yield on Investments 5.71% Investments Breakup: -A FS 29,955 (21%) 16,844 (14%) - HTM 113,647 (79%) 10
Slide 39: Digital Initiatives
DIGITAL INITIATIVES rNIZOLT INV TALLINVGI TA CD
Slide 40: New Digital Product Offerings
New Digital Product Offerings Product Offerings 01 02 03 04 05 RBI Voice DHI Connected New Initiatives Innovation Hub Tap & Go Biometric Credit Card Banking (15G /15H) Interoperable Products BBPS Pay to Scan & Pay/ Whatsapp Contact QR Card-less Cash Banking Withdrawal API/Robotic Digital Data Techno
Slide 41: Recent Awards
Recent Awards VOICE BIOMETRIC AUTHENTICATION Voice Biometric for net banking = authentication ARTIFICIAL INTELLIGENCE (AI) CITY UNION BANK ea"
Slide 42: Strategic Partnerships
Strategic Partnerships Account Digital Opening Lending Payments API BANKING Correspondent Customer Banking Digital Onboarding Insurance
Slide 43: Branch Network
BRANCH NETWORK 42
Slide 44: Strong Presence in the South
STRONG PRESENCE IN THE SOUTH As of March 2023 - 752 branches. 669 branches are located in South India out of which 519 in Tamil Nadu. No. of % of % of % of State Branches Deposits Advances Business Ta mi l na du 519 80 66 74 Ka rna ta ka 41 7 5 6 Andhra pra des h 49 2 8 5 1 Tel enga na 36 3 6 4 6 2
Slide 45: Shareholding Pattern
SHAREHOLDING PATTERN 44
Slide 46: A Well Diversified Investor Base
A WELL DIVERSIFIED INVESTOR BASE Position as on 31-Mar-2023 Major Institutional Shareholders SHAREHOLDERS HOLDING % QIB, NRI, SMALLCAP WORLD FUND, INC 4.94 6.10 0.89 HDFC MUTUAL FUND 4.47 Corp Bodies, Others, SBI ARBITRAGE OPPORTUNITIES FUND 3.94 3.12 2.11 AXIS MUTUAL FUND TRUSTEE LIMITED 3.22 CANAR
Slide 47: Corporate Governance
CORPORATE GOVERNANCE 46
Slide 48: A Well Experienced and Strong Board
A WELL EXPERIENCED AND STRONG BOARD Shri. M. Narayanan | B.Sc. FCA, Grad CMA, DISA Dr N. Kamakodi | B.Tech., MBA., PhD., CAIIB Non-Executive Chairman M.D. & C.E.O. Shri. M. Narayanan is a practicing Chartered Accountant by profession and has Dr. N. Kamakodi is serving as MD & CEO of the Bank from Ma
Slide 49: Transparent 'Corporate Governance' Practices
TRANSPARENT ‘CORPORATE GOVERNANCE’ PRACTICES Board consists Various sub- of 9 Independent committees of Code of conduct Directors (including Board functions Disclosure norms KYC / AML for Directors and 1 WomenDirector) to oversee the strictly adhered to Norms strictly Senior Management And MD & CEO
Slide 50: City Union Bank Ltd
CITY UNION BANK LTD Regd.Office :149,TSR Big Street,Kumbakonam Street, – 612001,Tamilandu. Admin Office :"Narayana" No.24 B,Gandhi Gandhi Nagar,Kumbakonam - 612001,Tamil Nadu. Tel :0435-2402322, 2401622,| FAX:0435 0435-2431746 | www.cityunionbank.com INVESTOR CONTACT Name :K.Jayaraman Jayaraman,GM M