City Union Bank Limited · NSE:CUB
City Union Bank — FY2021 Earnings Presentation
51 slides from City Union Bank's earnings presentation, May 31, 2021
Slide 1: Cover letter: Investor presentation to stock exchanges
(@) City UNION BANK LIMITED CIN : L65110TN1904PLC001287 cuB Regd. Office : 149, T.S.R. (Big) Street, Kumbakonam - 612 001, Thanjavur District, Tamil Nadu. Telephone No : 0435 - 2402322 Fax : 0435 - 2431746 adi ra E-mail : shares@cityunionbank.com — Website : www.cityunionbank.com C.O/Shares/LR-5/202
Slide 2: City Union Bank - March 2021
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 2021 Business Profile 38 40 45 47 Branch Network Technology 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 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 702 branches Continuous profitability and dividend payout in all Strong presence in South India (630 branches) 115+ years of operations of which 486 are in Tamil Nadu alone Business growth of 20%+ 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 2021
PERFORMANCE HIGHLIGHTS – MARCH 2021 10
Slide 12: Q4 FY 2021 Performance - A Snapshot
Q4 FY 2021 PERFORMANCE – A SNAPSHOT Deposits increased by 9% from Rs.408 Bn to Rs.445 Bn Y-o-Y Advances registered a growth of 7% from Rs.346 Bn to Rs.370 Bn Y-o-Y Total business grown by 8% from Rs.754 Bn to Rs.816 Bn Y-o-Y Gross Profit decreased to Rs.2,847 Mn from Rs.3,351 Mn (Q4-Vs Vs-Q4) and in
Slide 13: Q4 FY 2021 vs Q4 FY 2020 Performance - A Snapshot
Q4 FY 2021 VS Q4 FY 2020 PERFORMANCE – A SNAPSHOT (in INR Mn) 445,370 370,206 815,576 129,814 9% 7% 8% 27% 408,325 345,762 754,087 101,970 Deposits Advances Total Business CASA 2,847 1,112 4,285 50.37% -ve 2% % 3,351 (-)953 4,195 44.04% Gross Profit Net Profit Net Interest Cost to Income Income 0.84
Slide 14: FY 2021 vs FY 2020 Performance - A Snapshot
FY 2021 VS FY 2020 PERFORMANCE – A SNAPSHOT (in INR Mn) 445,370 370,206 815,576 129,814 9% 7% 8% 27% 408,325 345,762 754,087 101,970 Deposits Advances Total Business CASA 14,838 5,928 18,297 41.45% 11% 24% 9% % 13,414 4,763 16,752 43.04% Gross Profit Net Profit Net Interest Cost to Income Income 1.1
Slide 15: Financial Performance & Business Profile
FINANCIAL PERFORMANCE & BUSINESS PROFILE 14
Slide 16: FY 21 vs FY 20 Performance - A Snapshot
FY 21 VS FY 20 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS FY 2021 FY 2020 INC / (DEC) Growth Growth % Deposits 445,370 408,325 37,045 9% Advances 370,206 345,762 24,444 7% Total Business 815,576 754,087 61,489 8% Demand Deposits 37,537 29,244 8,293 28% Saving Deposits 92,
Slide 17: Q4 FY 21 vs Q4 FY 20 Performance - A Snapshot
Q4 FY 21 VS Q4 FY 20 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q4 FY 2021 Q4 FY 2020 INC / (DEC) Growth % Q3 FY 2021 Net Interest Income 4,285 4,195 90 2% 4,890 Other Income 1,451 1,793 -342 -ve 2,298 Operating Expenses 2,889 2,637 252 10% 2,604 Gross Profit 2,847 3,351
Slide 18: FY 21 vs FY 20 Performance - A Snapshot
FY 21 VS FY 20 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS FY 20-21 FY 19-20 INC / (DEC) Growth % Net Interest Income 18,296 16,752 1,544 9% Other Income 7,048 6,799 249 4% Operating Expenses 10,506 10,137 369 4% Gross Profit 14,838 13,414 1,424 11% Provisions & Contingenc
Slide 19: Provisions & Contingencies - Breakup
PROVISIONS & CONTINGENCIES – BREAKUP (in INR Mn) PARTICULARS Q4 FY 21 Q4 FY 20 FY 20-21 20 FY 19-20 Q3 FY 21 Q2 FY 21 Q1 FY 21 Provision for: - Tax -650 -200 1,000 1,100 700 500 450 - Bad Debts ** 4,860 3,105 5,990 6,310 310 320 500 - Covid 19 * -3,090 1250 310 1,250 1,250 1,150 1,000 - Standard Ass
Slide 20: Q4 FY 21 vs Q4 FY 20 - Income and Expenses Breakup
Q4 FY 21 VS Q4 FY 20 – 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 % 2021 2020 2021 2020 Interest on Loans 8,261 8,806 -ve Int Exp on Deposits 5,383 6,058 -ve Interest on Investments 1,436 1
Slide 21: FY 21 vs FY 20 - Income and Expenses Breakup
FY 21 VS FY 20 – INCOME AND EXPENSES BREAKUP (in INR Mn) INTEREST INCOME BREAKUP INTEREST EXPENSES BREAKUP FY FY FY FY PARTICULARS Growth % PARTICULARS Growth % 2021 2020 2021 2020 Interest on Loans 35,078 34,946 1% Int Exp on Deposits 22,348 24,369 -ve Interest on Investments 5,828 6,099 -ve Other
Slide 22: Deposits and Advances Growth - Over the Years
DEPOSITS AND ADVANCES GROWTH – OVER THE YEARS (in INR Mn) DEPOSITS ADVANCES 10% 12% CAGR 4,45,370 CAGR 3,70,206 4,08,325 3,30,652 3,45,762 3,84,480 3,28,526 2,82,386 3,01,157 2,41,125 31-MAR-2017 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-MAR-2017 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2
Slide 23: Strong Liability Franchise - Driver to Growth in FY 2020-21
STRONG LIABILITY FRANCHISE – DRIVER TO GROWTH IN FY 2020-21 2020 (in INR Mn) PARTICULARS 2016-17 2017 2017-18 2018-19 2019-20 2020-21 CAGR Current Account 24092 27862 32145 29244 37537 14% Savings Account 46298 51704 64837 72726 92277 21% CASA 70390 79566 96982 101970 129814 19% Term Deposits 230767
Slide 24: Income Growth Over the Years
INCOME GROWTH OVER THE YEARS… (in INR Mn) NET INTEREST INCOME GROWTH OTHER INCOME GROWTH 13% 11% CAGR 18,297 CAGR 16,115 16,752 7,048 6,799 14,303 11,988 5,321 5,144 4,840 31-MAR-2017 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-MAR-2017 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 CEB GROW
Slide 25: Key Business Indicators
KEY BUSINESS INDICATORS PARTICULARS Q4 FY 21 Q4 FY 20 FY 20-21 FY 19-20 Q3 FY 21 Q2 FY 21 Q1 FY 21 Cost of Deposits 5.05% 6.07% 5.36% 6.20% 5.16% 5.54% 5.89% Yield on Advances * 9.19% 10.46% 9.91% 10.76% 9.87% 10.21% 10.41% Yield on Investments 5.76% 6.54% 5.86% 6.69% 5.79% 5.79% 6.12% Net Interest
Slide 26: Key Business Ratios - Yearly Trends
KEY BUSINESS RATIOS – YEARLY TRENDS NET INTEREST MARGIN RETURN ON ASSETS 5.00% 1.70% 1.64% 1.60% 1.60% 1.50% 4.42% 4.50% 4.32% 1.50% 4.17% 3.98% 4.00% 1.40% 4.00% 1.30% 1.15% 1.20% 3.50% 1.10% 1.00% 1.00% 3.00% 0.90% 31-MAR-17 31-MAR-18 31-MAR-19 31-MAR-20 31-MAR-21 31-MAR-17 31-MAR-18 31-MAR-19 31-
Slide 27: Cost of Deposits & Yield on Advances
COST OF DEPOSITS & YIELD ON ADVANCES (in %) 16 14 13.56 13.49 13.43 13.18 12.83 12.47 12.10 12 11.46 10.95 10.76 9.91 10 8.44 8.37 8.15 8.11 7.62 8 6.94 6.82 6.29 6.17 6.20 6 5.36 4 2 0 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Spread between cost of deposits and y
Slide 28: Efficiency
EFFICIENCY COST INCOME RATIO (%) CASA RATIO (%) 43.04 29.15 41.67 41.45 24.22 25.22 24.97 23.37 40.94 38.46 31-Mar-2017 31-Mar-2018 31-Mar-2019 31-Mar-2020 31-Mar-2021 31-Mar-2017 31-Mar-2018 31-Mar-2019 31-Mar-2020 31-Mar-2021 BUSINESS PER EMPLOYEE PROFIT PER EMPLOYEE (in INR Mn) (in INR Mn) 139.38
Slide 29: Loan Book - Products Composition
LOAN BOOK – PRODUCTS COMPOSITION % toTotal Advances 1% Working capital loans yielding higher interest constitute 61% of advances Bills Purchased & Bills Discounted Re-pricing possible at short intervals Term Loan thus reducing interest rate risk 38% Cash Credit & Demand Loan ~90% of our loan book is
Slide 30: Loan Book Sectoral Deployment - Position as on 31.03.2021
LOAN BOOK SECTORAL DEPLOYMENT – POSITION AS ON 31.03.2021 (in INR Mn) Loans collateralized by Deposits 5,355 Retail Traders 5,827 Infrastructure 3,136 Large Industries 1% NBFC 6,784 Personal Loans 2% 2% 2,518 8,029 2% Others 16,358 4% 39% M S M E Housing Loan 6% 146,474 SECTORAL 21,020 DEPLOYMENT C
Slide 31: Loan Book Sectoral Deployment - Secured & Unsecured Advances
LOAN N BOOK SECTORAL DEPLOYMENT – POSITION AS ON 31.03.2021 (in INR Mn) SECURED & UNSECURED ADVANCES Particulars Amount (INR Mn) (%) Secured Loans 367,124 99% Unsecured Loans 3,081 1% Total 370,205 100% Trading & MSME loans earning higher yield constitute about 54% Diversified credit portfolio reduc
Slide 32: 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 2021 TEXTILE a) Cotton 16,643 (4%) b) Other Textiles 22,327 (6%) METALS a) Iron & Steel 9,322 (3%) b) Other Metals Amount % to Total 5,868 (1%) Industry Name (in INR Mn) Advances APER
Slide 33: Loan Book - Driver to Growth - FY 2020-21
LOAN BOOK - DRIVER TO GROWTH – FY 2020-21 2020 During the last year due to COVID pandemic and in the absence of other avenue for growth, the thrust given to improve Gold Loan which is increased by 97% from Rs.33268 Mn in FY 2020 to Rs. 65402 Mn FY 2021. (in INR Mn) GOLD LOAN PORTFOLIO 2018 2018-19
Slide 34: Asset Quality
ASSET QUALITY (in INR Mn) GROSS NPA QTM & GROSS NPA % NET NPA QTM & NET NPA % 18,932 10,752 14,134 5.11% 7,785 9,771 5,915 8,566 4.09% 4,748 6,820 4,083 2.97% 2.29% 2.95% 1.71% 1.70% 1.81% 2.83% 3.03% 31-Mar-17 31-Mar-18 31-Mar-19 31-Mar-20 31-Mar-21 31-Mar-17 31-Mar-18 31-Mar-19 31-Mar-20 31-Mar-21
Slide 35: Asset Quality Position - Movement Over the Years
ASSET QUALITY POSITION – MOVEMENT OVER THE YEARS (RS IN MN) FY MAR-16 FY MAR-17 MAR FY MAR-18 FY MAR-19 FY MAR-20 Q4 FY 21 FY MAR-21 NPA Opening balance 3,358 5,120 6,820 8,565 9,771 10,717 14,134 Additions A 4,290 4,796 5,749 6,322 11,104 11,097 11,131 Recovery made 734 905 1,623 1,980 1,644 698 1,
Slide 36: Restructured Accounts
RESTRUCTURED ACCOUNTS Quaterwise balance outstanding in respect of Restructured Standard borrowers Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Type of Restructuring No. of No. of No. of No. of No. of Amt Amt Amt Amt Amt Borrowers Borrowers Borrowers Borrowers Borrowers MSME 104 2813 120 3664 131 4550 191 785
Slide 37: Security Receipts
SECURITY RECEIPTS Balance outstanding of Security Receipts wrt NPA sold to ARC Period ended Amount (in INR Mn) Mar-19 3250 Mar-20 2474 Dec-20 1444 Mar-21 1429 No fresh sale to ARC on SR basis from FY 15-16. In the FY 13-14 & 14-15, we had sold some of the NPA accounts to ARC on SR basis to the tune
Slide 38: Investments - At a Glance
INVESTMENTS – AT AGLANCE Investments Breakup and Categorywise (in INR Mn) Particulars MAR 2021 MAR 2020 SLR Securities 93,328 89,395 Non-SLR Securities 1,904 2,967 Total Investments 95,232 92,362 Yield on Investments 5.86% 6.69% Investments Breakup: -A FS 10,899 (11%) 15,518 (17%) - HTM 84,333 (89%)
Slide 39: Branch Network
BRANCH NETWORK 38
Slide 40: Strong Presence in the South
STRONG PRESENCE IN THE SOUTH As of Mar 2021 - 702 branches. 630 branches are located in South India out of which 486 in Tamil Nadu. Only 2 branches opened during FY 20-21 No. of % of % of % of State Branches Deposits Advances Business Ta mi l na du 486 80 65 73 Ka rna ta ka 41 6 5 6 Andhra pra des h
Slide 41: Technology Initiatives
TECHNOLOGY INITIATIVES 40
Slide 42: Video KYC - Instant account opening via Website and app
Video KYC – Instant account opening via Website and app • Customers can open new Savings Accounts, Salary Accounts and Student Accounts instantly from their Mobile Banking app using “Open New CUB Account” option. • Customers can also visit https://onlineaccount.cityunionbank.in:8085/ on the website
Slide 43: One App for all your payment needs
One App for all your payment needs Innovation in ATMs - ICCW ~95% of transactions are on Alternate Channels First Bank to launch Interbank Cardless cash 3X growth in UPI transactions and payments withdrawals 1.5X growth in financial transactions on mobile via UPI Wealth Management at your fingertips
Slide 44: Open Banking Fintech Partnerships
Open Banking Fintech Partnerships The Bank is actively collaborating with startups and fintechs to deliver the best-in-class experience for our customers AI based Credit Origination and Marketing Automation Underwriting Digital Document Execution Connected Banking with ERPs Cloud Telephony and Analy
Slide 45: 3D: Digitization, Data Analytics and Digital Acquisition
3D: Digitization, Data Analytics and Digital Acquisition 1 Digitization and Automation 2 Data Analytics • Paperless onboarding for new clients • Document scanning and storage • Digital Document execution ocument Digitization Data visualization for Data driven underwriting Decision making • Credit Un
Slide 46: Shareholding Pattern
SHAREHOLDING PATTERN 45
Slide 47: A Well Diversified Investor Base
A WELL DIVERSIFIED INVESTOR BASE Position as on 31-Mar-2021 Major Institutional Shareholders SHAREHOLDERS HOLDING % QIB, NRI, 5.62 1.16 HDFC Midcap Opportunities Fund 4.48 Life Insurance Corporation of India 3.90 Corp Bodies, Others, 3.20 0.62 Franklin India Prima Fund 3.90 Axis Mutual Fund 3.66 HDF
Slide 48: Corporate Governance
CORPORATE GOVERNANCE 47
Slide 49: A Well Experienced and Strong Board
A WELL EXPERIENCED AND STRONG BOARD Shri. R. Mohan | B.Sc., MBA, CAIIB Dr N. Kamakodi | B.Tech., MBA., PhD., CAIIB Non-Executive Chairman M.D. & C.E.O. Shri. R. Mohan is qualified as bachelor of Science, Master of Business Dr. N. Kamakodi is serving as MD & CEO of the Bank from May 2011. He Administ
Slide 50: Transparent Corporate Governance Practices
TRANSPARENT ‘CORPORATE GOVERNANCE’ PRACTICES Board consists Various of 8 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 1 Executive op
Slide 51: City Union Bank Ltd - Investor Contact
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 &