City Union Bank Limited · NSE:CUB
City Union Bank — Q2 FY2022 Earnings Presentation
60 slides from City Union Bank's earnings presentation, Nov 12, 2021
Slide 1: City Union Bank Limited – Investor presentation covering letter
ge) City UNION BANK LIMITED CIN : L65110TN1904PLC001287 cCuB Regd. Office : 149, T.S.R. (Big) Street, Kumbakonam - 612 001, Thanjavur District, Tamil Nadu. aie ___ Telephone No : 0435 - 2402322 Fax : 0435 - 2431746 een E-mail: shares@cityunionbank.com Website : www.cityunionbank.com C.0/Shares/LR-5/
Slide 2: September 2021
SEPTEMBER 2021
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 2021 Business Profile 44 46 54 56 Branch Network Digital Initiatives Shareholding Pattern Corporate Governance 3
Slide 5: Overview
cuB OVERVIEW
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 702 branches Continuous profitability and dividend payout in all Strong presence in South India (630 branches) 116+ 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 – September 2021
PERFORMANCE HIGHLIGHTS – SEPTEMBER 2021 10
Slide 12: Q2 FY22 / H1 FY22 Performance – A Snapshot
Q2 FY 22 / H1 FY 22 PERFORMANCE – A SNAPSHOT Deposits increased by 12% from Rs.414 Bn to Rs.463 Bn Y-o-Y Advances registered a growth of 7% from Rs.354 Bn to Rs.380 Bn Y-o-Y Total business grown by 10% from Rs.769 Bn to Rs.843 Bn Y-o-Y Gross Profit increased by 5% to Rs.4,051 Mn from Rs.3,847 Mn (Q2
Slide 13: Q2 FY22 vs Q2 FY21 Performance – A Snapshot
Q2 FY 22 VS Q2 FY 21 PERFORMANCE – A SNAPSHOT (in INR Mn) 463,161 380,122 843,283 134,113 12% 7% 10% 26% 414,206 354,368 768,574 106,446 Deposits Advances Total Business CASA 4,051 1,821 4,783 40.51% 5% 15% 1% % 3,847 1,577 4,752 40.31% Gross Profit Net Profit Net Interest Cost to Income Income 1.32
Slide 14: H1 FY22 vs H1 FY21 Performance – A Snapshot
H1 FY 22 VS H1 FY 21 PERFORMANCE – A SNAPSHOT (in INR Mn) 463,161 380,122 843,283 134,113 12% 7% 10% 26% 414,206 354,368 768,574 106,446 Deposits Advances Total Business CASA 7,881 3,551 9,259 40.49% 6% 14% 2% % 7,407 3,117 9,121 40.36% Gross Profit Net Profit Net Interest Cost to Income Income 1.30
Slide 15: FY21 vs FY20 Performance – A Snapshot
FY 21 VS FY 20 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 1.15% 1
Slide 16: Financial Performance & Business Profile
FINANCIAL PERFORMANCE & BUSINESS PROFILE 15
Slide 17: Q2 FY22 vs Q2 FY21 Performance
Q2 FY 22 VS Q2 FY 21 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q2 FY 22 Q2 FY 21 INC / (DEC) Growth Growth % Q1 FY 22 Deposits 463,161 414,206 48,955 12% 446,059 Advances 380,122 354,368 25,754 7% 363,955 Total Business 843,283 768,574 74,709 10% 810,014 Demand Deposits
Slide 18: Q2 FY22 vs Q2 FY21 Performance
Q2 FY 22 VS Q2 FY 21 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q2 FY 22 Q2 FY 21 INC / (DEC) Growth % Q1 FY 22 Net Interest Income 4,783 4,752 31 1% 4,476 Other Income 2,027 1,693 334 20% 1,956 Operating Expenses 2,759 2,598 161 6% 2,602 Gross Profit 4,051 3,847 204 5% 3
Slide 19: H1 FY22 vs H1 FY21 Performance
H1 FY 22 VS H1 FY 21 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS H1 FY 22 H1 FY 21 INC / (DEC) Growth % Net Interest Income 9,259 9,121 138 2% Other Income 3,984 3,299 685 21% Operating Expenses 5,362 5,013 349 7% Gross Profit 7,881 7,407 474 6% Provisions & Contingencies
Slide 20: FY21 vs FY20 Performance
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 21: FY21 vs FY20 Performance
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 22: Provisions & Contingencies – Breakup
PROVISIONS & CONTINGENCIES – BREAKUP (in INR Mn) PARTICULARS Q2 FY 22 Q2 FY 21 H1 FY 22 H1 FY 21 FY 20-21 Provision for: - Tax 750 500 1,150 950 1,000 - Bad Debts 1,180 320 3,510 820 5,990 - Covid 19 - 1,150 (830) 2,150 310 - Standard Assets 310 80 440 120 1,045 - Depn on Investments - 200 - 200 178
Slide 23: Q2 FY22 vs Q2 FY21 – Income and Expenses Breakup
Q2 FY 22 VS Q2 FY 21 – 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 % 22 21 22 21 Interest on Loans 8,632 8,988 - Int Exp on Deposits 5,367 5,604 - Interest on Investments 1,542 1,521 1% Othe
Slide 24: H1 FY22 vs H1 FY21 – Income and Expenses Breakup
H1 FY 22 VS H1 FY 21 – 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 % 22 21 22 21 Interest on Loans 17,192 17,910 - Int Exp on Deposits 10,772 11,502 - Interest on Investments 2,905 2,922 - O
Slide 25: FY21 vs FY20 – 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 26: Strong Deposits and Advances Growth
STRONG DEPOSITS AND ADVANCES GROWTH (in INR Mn) DEPOSITS ADVANCES 10% 11% CAGR 4,45,370 4,63,161 CAGR 3,70,206 3,80,122 4,08,325 3,30,652 3,45,762 3,84,480 3,28,526 2,82,386 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 30-SEP-2021 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 30-SEP-2021 BUSINE
Slide 27: Income Growth Over the Years
INCOME GROWTH OVER THE YEARS… (in INR Mn) NET INTEREST INCOME GROWTH OTHER INCOME GROWTH 11% 10% CAGR 18,297 CAGR 16,115 16,752 6,799 7,048 14,303 5,321 5,144 9,259 (6M) 3,984 (6M) 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 30-SEP-2021 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 30-SEP-2021
Slide 28: Key Business Indicators
KEY BUSINESS INDICATORS PARTICULARS Q2 FY 22 Q2 FY 21 H1 FY 22 H1 FY 21 FY 20-21 Cost of Deposits 4.82% 5.54% 4.80% 5.62% 5.36% Yield on Advances 9.49% 10.21% 9.45% 10.31% 9.91% Yield on Investments 5.75% 5.79% 5.68% 5.94% 5.86% Net Interest Margin 4.03% 4.12% 3.95% 4.05% 4.00% Cost to Income 40.51%
Slide 29: Key Business Ratios – Yearly Trends
KEY BUSINESS RATIOS – YEARLY TRENDS NET INTEREST MARGIN RETURN ON ASSETS 5.00% 1.70% 1.64% 1.60% 1.60% 4.42% 4.50% 4.32% 1.50% 3.98% 4.00% 1.40% 1.30% 3.95% 4.00% 1.30% 1.20% 1.15% 3.50% 1.10% 1.00% 1.00% 3.00% 0.90% 31-MAR-18 31-MAR-19 31-MAR-20 31-MAR-21 30-SEP-21 31-MAR-18 31-MAR-19 31-MAR-20 31-
Slide 30: 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 12.10 12 11.46 10.95 10.76 9.91 10 9.45 8.44 8.37 8.11 8.15 7.62 8 6.82 6.29 6.17 6.20 6 5.36 4.80 4 2 0 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Sep 21 Spread between cost of deposits and yi
Slide 31: Efficiency
EFFICIENCY COST INCOME RATIO (%) CASA RATIO (%) 43.04 29.15 28.96 41.67 41.45 24.22 25.22 24.97 40.49 38.46 31-Mar-2018 31-Mar-2019 31-Mar-2020 31-Mar-2021 30-Sep-2021 31-Mar-2018 31-Mar-2019 31-Mar-2020 31-Mar-2021 30-Sep-2021 BUSINESS PER EMPLOYEE PROFIT PER EMPLOYEE (in INR Mn) (in INR Mn) 148.72
Slide 32: Loan Book – Products Composition
LOAN BOOK – PRODUCTS COMPOSITION % toTotal Advances 1% Working capital loans yielding higher interest constitute 62% of advances Bills Purchased & Bills Discounted Term Loan 37% Cash Credit & Demand Loan Re-pricing possible at short intervals thus reducing interest rate risk 62% Loan Book Products C
Slide 33: Loan Book Sectoral Deployment – 30.09.2021
LOAN BOOK SECTORAL DEPLOYMENT – POSITION AS ON 30.09.2021 (in INR Mn) Loans collateralized by Deposits 5,691 Large Industries 6,251 Infrastructure 3,154 Personal Loans 1% NBFC 9,062 Retail Traders 2% 2% 3,460 10,332 2% Others 17,785 5% Housing Loan 38% 20,214 5% SECTORAL MSME CRE DEPLOYMENT 141,816
Slide 34: Loan Book Sectoral Deployment – Secured & Unsecured Advances
LOAN BOOK SECTORAL DEPLOYMENT – POSITION AS ON 30.09.2021 (in INR Mn) SECURED & UNSECURED ADVANCES Particulars Amount (INR Mn) (%) Secured Loans 377,590 99% Unsecured Loans 2,532 1% Total 380,122 100% Trading & MSME loans constitute about 53% Diversified credit portfolio reduces credit risk and Lowe
Slide 35: Loan Book – Advances to Major Industries
Corporate Governance Loan Book – Advances to Major Industries ( in I N R M n ) Advances to Major Industries 30th September 2021 TEXTILE a) Cotton 16,220 (4%) b) Other Textiles 22,951 (6%) METALS a) Iron & Steel 9,651 (3%) Amount % to Total Industry Name b) Other Metals 6,599 (2%) (in INR Mn) Advance
Slide 36: Loan Book – Driver to Growth – Q2 FY22
LOAN BOOK - DRIVER TO GROWTH – Q2 FY 22 During the last few quarters due to COVID pandemic and in the absence of other avenue for growth, the thrust given to improve Gold Loan which is increased by 73% from Rs.45,371 Mn in Q2 FY 21 to Rs. 78,493 Mn in Q2 FY 22. (in INR Mn) GOLD LOAN PORTFOLIO Sep-
Slide 37: Asset Quality
ASSET QUALITY (in INR Mn) GROSS NPA QTM & GROSS NPA % NET NPA QTM & NET NPA % 21,193 12,941 20,354 12,422 18,932 10,752 14,134 7,785 5.59% 5.58% 9,771 5.11% 5,915 8,565 3.49% 3.48% 4,748 2.97% 4.09% 2.29% 1.81% 1.70% 3.03% 2.95% 31-Mar-18 31-Mar-19 31-Mar-20 31-Mar-21 30-Jun-21 30-Sep-21 31-Mar-18 3
Slide 38: Asset Quality Position – Movement Over the Years
ASSET QUALITY POSITION – MOVEMENT OVERTHE YEARS (In INR MN) FY MAR-17 FY MAR-18 FY MAR-19 FY MAR-20 FY MAR-21 Q1 FY 22 Q2 FY 22 NPA Opening balance 5,120 6,820 8,565 9,771 14,134 18,932 20,354 Additions A 4,796 5,749 6,322 11,104 11,131 4,822 2,974 Recovery made 905 1,623 1,980 1,644 1,950 701 959 U
Slide 39: Asset Quality – Gold Loan Portfolio
ASSET QUALITY – GOLD LOAN PORTFOLIO (In INR MN) No. of A/cs Balance Gold Loan –Total 697,264 78,493 Of which, - Standard Accounts 696,452 78,336 - N PA 812 157 Gross NPA 21,193 % of Gold Loan NPA to Gold Loan Portfolio 0.20% % of Gold Loan NPA to Gross NPA 0.74% 38
Slide 40: Status of ECLGS Accounts Over the Period
STATUS OF ECLGS ACCOUNTS OVER THE PERIOD (In INR MN) Quarter - No. of No. of ECLGS No. of ECLGS No. of ECLGS No. of ECLGS No. of ECLGS No. of ECLGS ECLGS borrowers borrowers Jun-20 borrowers Sep-20 borrowers Dec-20 borrowers Mar-21 borrowers Jun-21 borrowers Sep-21 Availed closed ECLGS Jun-20 3780 6
Slide 41: Movement of ECLGS Loan Availed & Its Funded Exposure
MOVEMENT OF ECLGS LOAN AVAILED & ITS FUNDED EXPOSURE (In INR MN) Funded Exposure of accounts those availed ECLGS Quarter - ECLGS ECLGS - Op Reduction in Availed Bal Exposure Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Jun-20 6747 47572 47249 46768 45956 45045 43671 3900 Sep-20 8379 57070 55971 54960 5
Slide 42: Restructured Accounts
RESTRUCTURED ACCOUNTS During Q2 FY 22, we have restructured 45 standard borrower accounts to the tune of Rs.3223 Mn under MSME and 295 borrowers to the tune of Rs.927 Mn under Non-MSME. Quaterwise balance outstanding in respect of Restructured Standard borrowers (In INR MN) Sep-20 Dec-20 Mar-21 Jun-
Slide 43: Security Receipts
SECURITY RECEIPTS During Q2 FY 22, we have sold 66 no. of accounts amounting to Rs.136 Mn to ARC on Cash cum SR basis in the ratio of 70 : 30 . Apart from that, one account amounting to Rs.180 Mn sold to ARC on cash basis. Balance outstanding of Security Receipts wrt NPA sold to ARC Period ended Amo
Slide 44: Investments – At a Glance
INVESTMENTS – AT AGLANCE Investments Breakup and Categorywise (in INR Mn) Particulars SEP 2021 SEP 2020 SLR Securities 107,089 105,298 Non-SLR Securities 1,902 3,121 Total Investments 108,991 108,419 Yield on Investments 5.68% 5.94% Investments Breakup: -A FS 10,966 (10%) 23,175 (21%) - HTM 98,025 (
Slide 45: Branch Network
cuB BRANCH NETWORK
Slide 46: Strong Presence in the South
STRONG PRESENCE IN THE SOUTH As of Sep 2021 - 702 branches. 630 branches are located in South India out of which 486 in Tamil Nadu. No. of % of % of % of State Branches Deposits Advances Business Tamilnadu 486 81 66 74 Karnataka 41 5 5 5 Andhraprades h 45 2 8 5 1 Tel enga na 34 3 5 4 3 2 Ma haras ht
Slide 47: Digital Banking Initiatives
DIGITAL BANKING INITIATIVES 46
Slide 48: Digital Journey of our Customers (Retail & Corporate)
Digital Journey of our Customers (Retail & Corporate) 1 Starting Relationship with our Bank 4 Investments/TAX Planning • Fixed Deposits • Demat 3 in 1 Account • Instant Savings Bank and Salary • Mutual Funds and Bonds savings account through • ASBA - IPO/NFO/FPO/NCD’s Missed Call, Website and ‘All
Slide 49: Seamless Customer Digital Journey
Seemless Customer Digital Journey Internet Banking Mobile Banking Conversational Bot Online FD for Corporates • Conversational Bot • Multilingual Conversational Bot Online FD for non customers through • Utility Payments • Financial & Non Financial Transactions UPI • Wealth Management • Customer
Slide 50: Insta Products
Insta Products Video KYC Loans Offers & E-Shopping One of the early adopter to launch AI Based Digital Lending – Two Customized offer VKYC Wheeler, Four Wheeler, Loan Against Easy Buy - Instant connectivity 95% of accounts are opened through Property, Home Loan to all Merchants through CUB
Slide 51: Technology Products
Technology Products ATM Net Banking Mobile Banking POS Digital Lending Insta Jewel Loan Whatsapp Social Media College Fee Inter-operable Wallet Prepaid Cards Credit Cards Payment Cash Withdrawal Banking Banking Using UPI (ICCW) Other Products/Facilities Business Debit/Credit Card for Corporates Mu
Slide 52: Strategic Fintech Partnerships – New Initiatives
Strategic Fintech Partnerships – New Initiatives AI Based Credit Document E Signing Connected Digi Mall Account Underwriting and E Stamping Banking (Shopping @ All in Aggregator One App) Framework Buy now Pay Later (Debit Credit Card Process Digital Marketing Pay as You Go Automation Automation Card
Slide 53: Data Analytics & Digital Acquisition
Data Analytics & Digital Acquisition 1 Digitization and Automation 2 Data Analytics • Paperless onboarding for new clients • Document scanning and storage • Digital Document execution Document Digitization Data visualization for Decision making Data driven underwriting • Credit Underwriting • Back o
Slide 54: 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 which is a part of Paperless on-boarding initiatives for new clients. • Customers can al
Slide 55: Shareholding Pattern
SHAREHOLDING PATTERN LIZANrR I
Slide 56: A Well Diversified Investor Base
A WELL DIVERSIFIED INVESTOR BASE Position as on 30-Sep-2021 Major Institutional Shareholders SHAREHOLDERS HOLDING % QIB, NRI, 6.71 Franklin India Tax Shield 4.68 1.06 HDFC Midcap Opportunities Fund 4.47 Corp Bodies, Others, SBI Long Term Advantage Fund 3.67 1.41 3.64 2.89 DSP Arbitrage Fund Axis Mut
Slide 57: Corporate Governance
CORPORATE GOVERNANCE Ji T- FORA
Slide 58: 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 59: Transparent Corporate Governance Practices
TRANSPARENT ‘CORPORATE GOVERNANCE’ PRACTICES Board consists Various sub- 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 Executi
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