City Union Bank Limited · NSE:CUB
City Union Bank — Q2 FY2023 Earnings Presentation
60 slides from City Union Bank's earnings presentation, Nov 4, 2022
Slide 1: Exchange filing cover letter
CITY UNION BANK LIMITED CIN : L65110TN1904PLC001287 Regd. Office: 149, T.S.R. (Big) Street, Kumbakonam - 612001, Thanjavur District, Tamil Nadu Telephone No: 0435-2402322 Fax: 0435-2431746 Lll E-mail: shares@cityunionbank.com ; Website: www.cityunionbank.com C.O/Shares/LR-5/2022-23 November 4, 2022
Slide 2: September 2022
SEPTEMBER 2022
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 15 Overview Performance Highlights – Financial Performance & September 2022 Business Profile 42 44 54 56 Branch Network Digital Initiatives 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 with granular asset profile including providing short term and long term
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 for equity shares shareholders & employees rewarded Scheduled bank since ‘The Union Bank Limited’ for core banking
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 727 branches Continuous profitability and dividend payout in all Strong presence in South India (644 branches) 115+ years of operations of which 495 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 – September 2022
PERFORMANCE HIGHLIGHTS – SEPTEMBER 2022 10
Slide 12: Q2 FY23 / H1 FY23 Performance – A Snapshot
Q2 FY 23 / H1 FY 23 PERFORMANCE – A SNAPSHOT Deposits increased by 8% from Rs.463 Bn to Rs.499 Bn Y-o-Y Advances registered a growth of 12% from Rs.380 Bn to Rs.427 Bn Y-o-Y Total business grown by 10% from Rs.843 Bn to Rs.926 Bn Y-o-Y Gross Profit increased by 13% to Rs.4,565 Mn from Rs.4,051 Mn (Q
Slide 13: Q2 FY23 vs Q2 FY22 Performance – A Snapshot
Q2 FY 23 VS Q2 FY 22 PERFORMANCE – A SNAPSHOT (in INR Mn) 498,776 427,016 925,792 156,094 8% 12% 10% 16% 463,161 380,122 843,283 134,113 Deposits Advances Total Business CASA 4,565 2,765 5,679 38.43% 13% 52% 19% % 4,051 1,821 4,783 40.51% Gross Profit Net Profit Net Interest Cost to Income Income 1.
Slide 14: H1 FY23 vs H1 FY22 Performance – A Snapshot
H1 FY 23 VS H1 FY 22 PERFORMANCE – A SNAPSHOT (in INR Mn) 498,776 427,016 925,792 156,094 8% 12% 10% 16% 463,161 380,122 843,283 134,113 Deposits Advances Total Business CASA 9,036 5,016 10,928 39.10% 15% 41% 18% % 7,858 3,551 9,259 40.49% Gross Profit Net Profit Net Interest Cost to Income Income 1
Slide 15: FY2022 vs FY2021 Performance – A Snapshot
FY 2022 VS FY 2021 PERFORMANCE – A SNAPSHOT (in INR Mn) 476,897 411,560 888,457 155,294 7% 11% 9% 20% 445,373 370,206 815,579 129,814 Deposits Advances Total Business CASA 15,953 7,602 19,165 40.37% 9% 28% 5% % 14,678 5,928 18,297 41.72% Gross Profit Net Profit Net Interest Cost to Income Income 1.3
Slide 16: Financial Performance & Business Profile
FINANCIAL PERFORMANCE & BUSINESS PROFILE 15
Slide 17: Q2 FY23 vs Q2 FY22 Performance - A Snapshot
Q2 FY 23 VS Q2 FY 22 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q2 FY 23 Q2 FY 22 INC / (DEC) Growth Growth % Q1 FY 23 Deposits 498,776 463,161 35,615 8% 487,721 Advances 427,016 380,122 46,894 12% 409,341 Total Business 925,792 843,283 82,509 10% 897,062 Demand Deposits
Slide 18: Q2 FY23 vs Q2 FY22 Performance - A Snapshot
Q2 FY 23 VS Q2 FY 22 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q2 FY 23 Q2 FY 22 INC / (DEC) Growth % Q1 FY 23 Net Interest Income 5,679 4,783 896 19% 5,249 Other Income 1,735 2,027 -292 - 2,175 Operating Expenses 2,849 2,759 90 3% 2,953 Gross Profit 4,565 4,051 514 13%
Slide 19: H1 FY23 vs H1 FY22 Performance - A Snapshot
H1 FY 23 VS H1 FY 22 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS H1 FY 23 H1 FY 22 INC / (DEC) Growth % Net Interest Income 10,928 9,259 1,669 18% Other Income 3,910 3,961 -51 -ve Operating Expenses 5,802 5,361 441 8% Gross Profit 9,036 7,859 1,177 15% Provisions & Conting
Slide 20: FY22 vs FY21 Performance - A Snapshot
FY 22 VS FY 21 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS FY 2022 FY 2021 INC / (DEC) Growth Growth % Deposits 476,897 445,373 31,524 7% Advances 411,560 370,206 41,354 11% Total Business 888,457 815,579 72,878 9% Demand Deposits 46,193 37,537 8,656 23% Saving Deposits 10
Slide 21: FY22 vs FY21 Performance - A Snapshot
FY 22 VS FY 21 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS FY 21-22 FY 20-21 INC / (DEC) Growth % Net Interest Income 19,165 18,297 868 5% Other Income 7,591 6,887 704 10% Operating Expenses 10,803 10,506 297 3% Gross Profit 15,953 14,678 1,275 9% Provisions & Contingencie
Slide 22: Provisions & Contingencies – Breakup
PROVISIONS & CONTINGENCIES – BREAKUP (in INR Mn) PARTICULARS Q2 FY 23 Q2 FY 22 H1 FY 23 H1 FY 22 FY 21-22 Provision for: - Tax 750 750 1,450 1,150 2,250 - Bad Debts 1,050 1,180 2,450 3,510 5,535 - Covid 19 - - 120 (830) - 80 - Standard Assets - 310 - 440 550 - Restructuring / FITL - 105 - 108 108 -
Slide 23: Q2 FY23 vs Q2 FY22 – Income and Expenses Breakup
Q2 FY 23 VS Q2 FY 22 – INCOME AND EXPENSES BREAKUP (in INR Mn) INTEREST INCOME BREAKUP INTEREST EXPENSES BREAKUP Q2 FY Q2 FY Q2 FY Q2 FY PARTICULARS Growth % PARTICULARS Growth % 23 22 23 22 Interest on Loans 9,553 8,632 11% Int Exp on Deposits 5,528 5,367 3% Interest on Investments 2,134 1,542 38%
Slide 24: H1 FY23 vs H1 FY22 – Income and Expenses Breakup
H1 FY 23 VS H1 FY 22 – INCOME AND EXPENSES BREAKUP (in INR Mn) INTEREST INCOME BREAKUP INTEREST EXPENSES BREAKUP H1 FY H1 FY H1 FY H1 FY PARTICULARS Growth % PARTICULARS Growth % 23 22 23 22 Interest on Loans 18,751 17,192 8% Int Exp on Deposits 10,722 10,772 - Interest on Investments 4,029 2,905 39
Slide 25: FY22 vs FY21 – Income and Expenses Breakup
FY 22 VS FY 21 – INCOME AND EXPENSES BREAKUP (in INR Mn) INTEREST INCOME BREAKUP INTEREST EXPENSES BREAKUP FY FY FY FY PARTICULARS Growth % PARTICULARS Growth % 2022 2021 2022 2021 Interest on Loans 34,540 35,078 -2% Int Exp on Deposits 21,197 22,348 -5% Interest on Investments 6,305 5,828 8% Other
Slide 26: Strong Deposits and Advances Growth
STRONG DEPOSITS AND ADVANCES GROWTH (in INR Mn) DEPOSITS ADVANCES 4,76,897 4,98,776 4,45,370 4,08,325 4,11,560 4,27,016 3,84,480 3,45,762 3,70,206 3,30,652 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-MAR-2022 30-SEP-2022 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-MAR-2022 30-SEP-2022 BUSINESS CASA 8,88,457 9
Slide 27: Income Growth Over the Years
INCOME GROWTH OVER THE YEARS… (in INR Mn) NET INTEREST INCOME GROWTH OTHER INCOME GROWTH 7,591 19,165 6,799 6,887 18,297 16,115 16,752 5,144 10,928 (6M) 3,910 (6M) 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-MAR-2022 30-SEP-2022 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-MAR-2022 30-SEP-2022 CEB GROWTH NET P
Slide 28: Key Business Indicators
KEY BUSINESS INDICATORS PARTICULARS Q2 FY 23 Q2 FY 22 H1 FY 23 H1 FY 22 FY 21-22 Cost of Deposits 4.51% 4.82% 4.47% 4.80% 4.68% Yield on Advances 9.39% 9.49% 9.22% 9.45% 9.36% Yield on Investments 5.86% 5.75% 5.84% 5.68% 5.71% Net Interest Margin 4.09% 4.03% 4.02% 3.95% 3.98% Cost to Income 38.43% 4
Slide 29: Key Business Ratios – Yearly Trends
KEY BUSINESS RATIOS – YEARLY TRENDS NET INTEREST MARGIN RETURN ON ASSETS 5.00% 1.70% 1.64% 1.59% 1.60% 4.50% 4.32% 1.50% 1.40% 1.35% 3.98% 4.00% 3.98% 4.02% 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 30-SEP-22 31-MAR-19 31-MAR-20 31-MAR-21 31-
Slide 30: 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 9.22 8.44 8.37 8.15 8 7.62 6.82 6.29 6.17 6.20 6 5.36 4.68 4.47 4 2 0 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 22 Sep 22 Spread between cost of deposits and yie
Slide 31: Efficiency
EFFICIENCY COST INCOME RATIO (%) CASA RATIO (%) 42.47 32.56 31.30 42.12 29.15 41.72 25.22 24.97 40.37 39.10 31-Mar-2019 31-Mar-2020 31-Mar-2021 31-Mar-2022 30-Sep-2022 31-Mar-2019 31-Mar-2020 31-Mar-2021 31-Mar-2022 30-Sep-2022 BUSINESS PER EMPLOYEE PROFIT PER EMPLOYEE (in INR Mn) (in INR Mn) 1.88 1
Slide 32: Loan Book – Products Composition
LOAN BOOK – PRODUCTS COMPOSITION % toTotal Advances 1% Working capital loans yielding higher interest constitute 63% of advances Bills Purchased & Bills Discounted Term Loan 36% Cash Credit & Demand Loan Re-pricing possible at short intervals thus reducing interest rate risk 63% Loan Book Products C
Slide 33: Loan Book Sectoral Deployment – Position as on 30.09.2022
LOAN BOOK SECTORAL DEPLOYMENT – POSITION AS ON 30.09.2022 (in INR Mn) Loans collateralized by Deposits 6,379 Retail Trade Large 9,063 Industries Personal Loan 6,945 NBFC 9,217 4,532 1% Infrastructure Others 2% 2% 3,329 14,243 2% 3% Wholesale Traders 19,017 5% Housing Loan 5% 20,483 43% SECTORAL MSME
Slide 34: Loan Book Sectoral Deployment – Secured & Unsecured Advances
LOAN BOOK SECTORAL DEPLOYMENT – POSITION AS ON 30.09.2022 (in INR Mn) SECURED & UNSECURED ADVANCES Particulars Amount (INR Mn) (%) Secured Loans 424,322 99% Unsecured Loans 2,694 1% Total 427,016 100% Trading & MSME loans constitute 50% of loan portfolio Diversified credit portfolio reduces credit r
Slide 35: 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 30th September 2022 TEXTILE a) Cotton 18,146 (4%) b) Other Textiles 26,617 (6%) METALS a) Iron & Steel 11,028 (3%) Amount % to Total Industry Name b) Other Metals 9,704 (2%) (in INR Mn) Advanc
Slide 36: Loan Book - Driver to Growth – Q2 FY23
LOAN BOOK - DRIVER TO GROWTH – Q2 FY 23 During the last few quarters, we have given more thrust to Gold Loans which is increased by 12% from Rs.78,493 Mn in Q2 FY 22 to Rs.100,435 Mn in Q2 FY 23. Also, the % of Gold Loans portfolio to Gross Advances improved to 24% (in INR Mn) GOLD LOAN PORTFOLIO
Slide 37: Asset Quality
ASSET QUALITY (in INR Mn) GROSS NPA QTM & GROSS NPA % NET NPA QTM & NET NPA % 19,332 19,035 11,911 11,612 18,932 18,618 11,287 10,752 14,134 7,785 9,771 5.11% 5,915 4.70% 4.65% 4.36% 2.97% 2.95% 4.09% 2.89% 2.69% 2.29% 1.81% 2.95% 31-Mar-19 31-Mar-20 31-Mar-21 31-Mar-22 30-Jun-22 30-Sep-22 31-Mar-19
Slide 38: Asset Quality Position – Movement Over the Years
ASSET QUALITY POSITION – MOVEMENT OVER THE YEARS (In INR MN) FY MAR-18 FY MAR-19 FY MAR-20 FY MAR-21 FY MAR-22 Q2 FY 23 H1 FY 23 NPA Opening balance 6,820 8,565 9,771 14,134 18,932 19,035 19,332 Additions A 5,749 6,322 11,104 11,131 12,757 2,615 5,317 Recovery made 1,623 1,980 1,644 1,950 4,424 1,27
Slide 39: Asset Quality – Gold Loan Portfolio
ASSET QUALITY – GOLD LOAN PORTFOLIO (In INR MN) No. of A/cs Balance Gold Loan –Total 793,453 100,435 Of which, - Standard Accounts 792,880 100,398 - N PA 573 37 Gross NPA 18,618 % of Gold Loan NPA to Gold Loan Portfolio 0.04% % of Gold Loan NPA to Gross NPA 0.20% 38
Slide 40: Restructured Accounts
RESTRUCTURED ACCOUNTS Quarterwise balance outstanding in respect of Restructured Standard borrowers (In INR MN) Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 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 15398 314 15226 3
Slide 41: Security Receipts
SECURITY RECEIPTS During Q2 FY 23, we have not sold any accounts to ARC. Balance outstanding of Security Receipts wrt NPA sold to ARC Period ended Amount (in INR Mn) Mar-20 2474 Dec-20 1444 Mar-21 1429 Jun-21 1308 Sep-21 1177 Dec-21 1118 Mar-22 917 Jun-22 819 Sep-22 804 In the FY 13-14 & 14-15, we h
Slide 42: Investments – At a Glance
INVESTMENTS – AT AGLANCE Investments Breakup and Categorywise (in INR Mn) Particulars SEP 2022 SEP 2021 SLR Securities 146,275 107,089 Non-SLR Securities 1,623 1,902 Total Investments 147,898 108,991 Yield on Investments 5.84% 5.68% Investments Breakup: -A FS 33,426 (23%) 10,966 (10%) - HTM 114,472
Slide 43: Branch Network
BRANCH NETWORK 1LAASNIU/IZ
Slide 44: Strong Presence in the South
STRONG PRESENCE IN THE SOUTH As of Sept 2022 - 727 branches. 644 branches are located in South India out of which 495 in Tamil Nadu. No. of % of % of % of State Branches Deposits Advances Business Ta milna du 495 81 66 74 Ka rna ta ka 41 6 5 5 Andhra pra des h 49 2 7 5 1 Telenga na 35 3 6 4 3 2 Ma h
Slide 45: Be a part of the Digital Innovation
Be a part of the Digital Innovation “ Upgrading our banking to deliver an easy “ DO IT YOURSELF ” self banking operations with seamless digital platform 44
Slide 46: New Digital Product Offerings
New Digital Product Offerings Product Offerings 01 02 03 04 05 UPI DHI Connected Voice New Initiatives Tap & Go 123Pay Credit Card Banking Biometric Interoperable Products Whatsapp Pay to Scan & Pay/ Card-less Cash Banking Contact QR BBPS Withdrawal Technology/ AI/ Robotic API Process Digital Video
Slide 47: Strategic Partnerships
Strategic Partnerships Digital Corporate Banking Marketing Digitization Solutions Voice Biometric Cards AI/ML Conversational Bot Customer Merchants/ Onboarding Digital Collections Landing 46
Slide 48: Strategic Partnerships
Strategic Partnerships • Voice Biometric – Kaizen Voiz – Voice Biometric authentication for Mobile Banking • Corporate Banking Solutions – Vanghee - Connected Banking solution which connects Net banking and accounting software. • Digital Marketing – Gamooga, Gupshup, Sinch, Karix –- Communication of
Slide 49: Digital Banking Products
Digital Banking Products Retail Banking Corporate Banking 01 Savings Account Opening 01 Online Current Account Opening 02 UPI Scan and Pay 02 Positive Pay 03 24*7 Fund Transfers 03 Digital Signature [Hard / Soft] 04 Cardless Withdrawal 04 Letter of Credit through Net Banking 05 Deposit Online Servic
Slide 50: Financial Inclusion through UPI Features
Financial Inclusion through UPI Features Register for UPI with your Feature/Smart Phone with UPI in 3 Steps 2 Choose Send Money Pay to Request IPO using 3 Pay Contact Money UPI ID 1 Call Make an IVR Call to +91 8 0 4516 3581 Scan & Pay using Merchant Generate QR Mandate and make UPI CUB & other Paym
Slide 51: Voice Biometric
Voice Biometric City Union Bank Ltd is proud to announce its participation as first bank in India in the innovation for rolling out the voice biometrics using 5G technology in association with Kaizen Voiz and Institute for Development and Research in Banking Technology (IDRBT). This Innovation was s
Slide 52: City Union Bank sets up Digital Banking Unit at Khammam in Telangana
City Union Bank sets up Digital Banking Unit at Khammam in Telangana As part of the Union Government’s mission of setting up 75 Digital Banking Units (DBUs) on the occasion of 75 years of Independence, Hon’ble Prime Minister Shri Narendra Modi launched the DBUs virtually on 16th October 2022. The 11
Slide 53: Awards
Awards IN THE CATEGORIES OF "Use of Emerging Technologies" City Union Bank is the proud winner of 2 awards @ "Digital Transformation Leader" to our GM-IT, Shri G.Sankaran 52
Slide 54: Awards
Awards City Union Bank received City Union Bank received Economic Times City Union Bank won the Finnoviti Awards 2022 "DATACON AWARD" "MostTrusted Digital Bank of the Year” for 'UPI 123 Pay' Under the category of Award at International by Banking Frontiers Holistic Large Data Service Pride Award 202
Slide 55: Shareholding Pattern
SHAREHOLDING PATTERN CLIAAPRITAMm LN | ErUIA
Slide 56: A Well Diversified Investor Base
A WELL DIVERSIFIED INVESTOR BASE Position as on 30-Sep-2022 Major Institutional Shareholders SHAREHOLDERS HOLDING % QIB, NRI, SMALLCAP WORLD FUND, INC 4.95 6.56 0.86 AXIS MUTUAL 4.82 HDFC TRUSTEE CO LTD 4.47 Corp Bodies, Others, TEMPLETON INDIA VALUE FUND 3.05 2.60 2.72 CANARA ROBECO MUTUAL FUND 2.4
Slide 57: Corporate Governance
CORPORATE GOVERNANCE JIT MUIPALPVIAYVIASC®.:
Slide 58: 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 59: 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 60: City Union Bank Ltd – Investor Contact
CITY UNION BANK LTD Regd.Office :149,TSR Big Street,Kumbakonam – 612001,Tamilandu. Admin Office :"Narayana" No.24 B,Gandhi Nagar,Kumbakonam - 612001,Tamil Nadu. Tel :0435-2402322, 2401622,| FAX:0435-2431746 | www.cityunionbank.com INVESTOR CONTACT Name :K.Jayaraman,GM Mob : +91 9344303740 Email : ja