City Union Bank Limited · NSE:CUB
City Union Bank — Q3 FY2019 Earnings Presentation
49 slides from City Union Bank's earnings presentation, Jan 28, 2019
Slide 1: Cover letter to stock exchanges
“NARAYANA’ Administrative Office, Cl jB No.24-B, Gandhi Nagar, Kumbakonam - 612 001. ventia eines Phone : 0435 - 2402322 - Fax: 0435 - 2431746 SCE E-mail: shares@cityunionbank.com - Website: www.cityunionbank.com CIN : L65110TN1904PLC001287 (@). City UNION BANK LTD., C.O/Shares/LR-5/2018-19 28" Janu
Slide 2: City Union Bank - December 2018
@aCity 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 15 Overview Performance Highlights – Financial Performance & December 2018 Business Profile 41 43 45 Branch Network Shareholding Pattern Corporate Governance 3
Slide 5: Overview
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 Continuous profitability and dividend payout in 616 branches all 110+ years of operations Strong presence in South India (552 branches) Business growth of 20%+ CAGR in last 10 years of which 426 are in Tamil Nadu alone 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 – December 2018
PERFORMANCE HIGHLIGHTS – DECEMBER 2018
Slide 12: Q3 & 9M FY 2019 Performance – A Snapshot
Q3 & 9M FY 2019 PERFORMANCE – A SNAPSHOT Deposits increased by 13% from Rs.313 Bn to Rs.355 BnY-o-Y Advances registered a growth of 17% from Rs.261 Bn to Rs.306 BnY-o-Y Total business grown by 15% to Rs.661 Bn from Rs.574 BnY-o-Y Gross Profit increased by 4% from Rs.2,965 Mn to Rs.3,068 Mn (Q3-Vs-Q3
Slide 13: Q3 FY 2019 vs Q3 FY 2018 Performance – A Snapshot
Q3 FY 2019 VS Q3 FY 2018 PERFORMANCE – A SNAPSHOT (All figures in INR Mn) 355,040 306,369 661,409 84,697 13% 17% 15% 21% 313,387 260,891 574,278 69,891 Deposits Advances Total Business CASA 3,068 1,781 4,181 42.96% 4% 15% 15% 2,965 1,548 3,651 39.10% Gross Profit Net Profit Net Interest Cost to Inco
Slide 14: 9M FY 2019 vs 9M FY 2018 Performance – A Snapshot
9M FY 2019 VS 9M FY 2018 PERFORMANCE – A SNAPSHOT (All figures in INR Mn) 355,040 306,369 661,409 84,697 13% 17% 15% 21% 313,387 260,891 574,278 69,891 Deposits Advances Total Business CASA 9,022 5,077 11,909 42.11% -ve 15% 12% 9,135 4,399 10,624 38.05% Gross Profit Net Profit Net Interest Cost to I
Slide 15: FY 2018 vs FY 2017 Performance – A Snapshot
FY 2018 VS FY 2017 PERFORMANCE – A SNAPSHOT (All figures in INR Mn) 328,526 282,386 610,912 79,567 9% 17% 13% 13% 301,157 241,125 542,282 70,390 Deposits Advances Total Business CASA 12,077 5,920 14,303 38.46% 22% 18% 19% % 9,937 5,028 11,988 40.94% Gross Profit Net Profit Net Interest Cost to Incom
Slide 16: Financial Performance & Business Profile
FINANCIAL PERFORMANCE & BUSINESS PROFILE
Slide 17: Q3 FY 19 vs Q3 FY 18 Performance - A Snapshot
Q3 FY 19 VS Q3 FY 18 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q3 FY 2019 Q3 FY 2018 INC / (DEC) Growth Growth % Q2 FY 2019 Deposits 355,040 313,387 41,653 13% 345,340 Advances 306,369 260,891 45,478 17% 297,850 Total Business 661,409 574,278 87,131 15% 643,190 Demand De
Slide 18: Q3 FY 19 vs Q3 FY 18 Performance - A Snapshot
Q3 FY 19 VS Q3 FY 18 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q3 FY 2019 Q3 FY 2018 INC / (DEC) Growth % Q2 FY 2019 Net Interest Income 4,181 3,651 530 15% 3,980 Other Income 1,198 1,217 -19 -ve 1,185 Operating Expenses 2,311 1,903 408 21% 2,206 Gross Profit 3,068 2,965
Slide 19: 9M FY 19 vs 9M FY 18 Performance - A Snapshot
9M FY 19 VS 9M FY 18 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS 9M FY 2019 9M FY 2018 INC / (DEC) Growth % Net Interest Income 11,909 10,624 1,285 12% Other Income 3,675 4,123 -448 -ve Operating Expenses 6,562 5,612 950 17% Gross Profit 9,022 9,135 -113 -ve Provisions & C
Slide 20: Provisions & Contingencies – Breakup
PROVISIONS & CONTINGENCIES – BREAKUP (in INR Mn) PARTICULARS Q3 FY 19 Q3 FY 18 9M FY 19 9M FY 18 FY 17-18 Provision for: - Tax 500 560 1,700 1,420 1,980 - Bad Debts 770 750 1,890 2,480 3,030 - Standard Assets 30 20 62 11 15 - Depn on Investments - 60 160 708 855 - Depn on Shifting - - 65 102 102 - R
Slide 21: FY 18 vs FY 17 Performance - A Snapshot
FY 18 VS FY 17 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS FY 2018 FY 2017 INC / (DEC) Growth Growth % Deposits 328,526 301,157 27,369 9% Advances 282,386 241,125 41,261 17% Total Business 610,912 542,282 68,630 13% Demand Deposits 27,863 24,092 3,771 16% Saving Deposits 5
Slide 22: FY 18 vs FY 17 Performance - A Snapshot
FY 18 VS FY 17 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS FY 2018 FY 2017 INC / (DEC) Growth % Net Interest Income 14,303 11,988 2,315 19% Other Income 5,321 4,839 482 10% Operating Expenses 7,547 6,890 657 10% Gross Profit 12,077 9,937 2,140 22% Provisions & Contingencie
Slide 23: Q3 FY 19 vs Q3 FY 18 – Income and Expenses Breakup
Q3 FY 19 VS Q3 FY 18 – INCOME AND EXPENSES BREAKUP (in INR Mn) INTEREST INCOME BREAKUP INTEREST EXPENSES BREAKUP Q3 FY Q3 FY Q3 FY Q3 FY PARTICULARS Growth % PARTICULARS Growth % 2019 2018 2019 2018 Interest on Loans 8,197 7,246 13% Int Exp on Deposits 5,361 4,872 10% Interest on Investments 1,383 1
Slide 24: 9M FY 19 vs 9M FY 18 – Income and Expenses Breakup
9M FY 19 VS 9M FY 18 – INCOME AND EXPENSES BREAKUP (in INR Mn) INTEREST INCOME BREAKUP INTEREST EXPENSES BREAKUP 9M FY 9M FY 9M FY 9M FY PARTICULARS Growth % PARTICULARS Growth % 2019 2018 2019 2018 Interest on Loans 23,393 21,168 11% Int Exp on Deposits 15,515 14,450 7% Interest on Investments 4.18
Slide 25: FY 18 vs FY 17 – Income and Expenses Breakup
FY 18 VS FY 17 – INCOME AND EXPENSES BREAKUP (in INR Mn) INTEREST INCOME BREAKUP INTEREST EXPENSES BREAKUP FY FY FY FY PARTICULARS Growth % PARTICULARS Growth % 2018 2017 2018 2017 Interest on Loans 28,404 25,902 10% Int Exp on Deposits 19,271 19,418 -ve Interest on Investments 5,228 5,385 -ve Other
Slide 26: Strong Deposits and Advances Growth
STRONG DEPOSITS AND ADVANCES GROWTH (in INR Mn) DEPOSITS ADVANCES 11% 15% CAGR CAGR 3,55,040 3,06,369 3,28,526 2,82,386 3,01,157 2,41,125 2,71,581 2,40,750 2,12,531 1,80,885 31-MAR-2015 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-DEC-2018 31-MAR-2015 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-DEC-2018 BUSINE
Slide 27: Income Growth Over the Years
INCOME GROWTH OVER THE YEARS… (in INR Mn) NET INTEREST INCOME GROWTH OTHER INCOME GROWTH 17% 17% CAGR CAGR 14,303 5,321 11,988 11,909 (9M) 4,840 4,041 4,100 9,810 3,675 (9M) 8,074 31-MAR-2015 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-DEC-2018 31-MAR-2015 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-DEC-2018
Slide 28: Key Business Indicators
KEY BUSINESS INDICATORS PARTICULARS Q3 FY 19 Q3 FY 18 9M FY 19 9M FY 18 FY 17-18 Cost of Deposits 6.17% 6.24% 6.13% 6.32% 6.29% Yield on Advances 10.96% 11.37% 10.89% 11.55% 11.46% Yield on Investments 6.97% 6.94% 6.94% 6.96% 6.95% Net Interest Margin 4.41% 4.41% 4.32% 4.45% 4.42% Cost to Income 42.
Slide 29: Key Business Ratios – Yearly Trends
KEY BUSINESS RATIOS – YEARLY TRENDS NET INTEREST MARGIN RETURN ONASSETS 5.00% 1.70% 1.65% 4.42% 1.65% 4.50% 4.32% 1.60% 4.17% 1.60% 4.00% 3.81% 1.55% 1.49% 1.50% 1.50% 3.44% 1.50% 3.50% 1.45% 3.00% 1.40% 31-MAR15 31-MAR16 31-MAR17 31-MAR18 31-DEC-18 31-MAR15 31-MAR16 31-MAR17 31-MAR18 31-DEC-18 COST
Slide 30: Cost of Deposits & Yield on Advances
COST OF DEPOSITS & YIELD ON ADVANCES (in %) 16 14 13.46 13.56 13.49 13.43 13.04 13.18 12.83 12.47 12.10 12 11.46 10.89 10 8.44 8.37 8.15 7.98 8.11 7.73 7.62 8 6.94 6.82 6.29 6.13 6 4 2 0 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Dec 18 Spread between cost of deposits and
Slide 31: Efficiency
EFFICIENCY COST INCOME RATIO (%) CASA RATIO (%) 42.83 23.37 24.22 23.86 42.11 19.23 20.37 40.94 40.10 38.46 31-Mar-2015 31-Mar-2016 31-Mar-2017 31-Mar-2018 31-Dec-2018 31-Mar-2015 31-Mar-2016 31-Mar-2017 31-Mar-2018 31-Dec-2018 BUSINESS PER EMPLOYEE PROFIT PER EMPLOYEE (in INR Mn) (in INR Mn) 121.46
Slide 32: Loan Book – Products Composition
LOAN BOOK – PRODUCTS COMPOSITION % toTotalAdvances 1% Working capital loans yielding higher interest constitute 65% of advances Bills Purchased & Bills Discounted Term Loan Re-pricing possible at short intervals thus reducing interest rate risk 34% Cash Credit & Demand Loan ~95% of our loan book is
Slide 33: Loan Book Sectoral Deployment – Position as on 31.12.2018
LOAN BOOK SECTORAL DEPLOYMENT – POSITION AS ON 31.12.2018 (in INR Mn) JL NonAgriculture Loans collateralized 3,493 by Deposits Infrastructure 4,892 2,866 Retail Traders 10,795 2% 1% NBFC Other Personal Loans 3% 2,087 14,562 4% Commercial Real Estate 5% 15,468 Housing Loans 6% 20,118 34% M S M E 103,
Slide 34: Loan Book Sectoral Deployment – Secured & Unsecured Advances
LOAN BOOK SECTORAL DEPLOYMENT – POSITION AS ON 31.12.2018 (in INR Mn) SECURED & UNSECURED ADVANCES Particulars Amount (INR Mn) Q3 FY 2019 Secured Loans 304,051 99% Unsecured Loans 2,318 1% Total 306,369 100% Trading & MSME loans earning higher yield constitute about 51% Diversified credit portfolio
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 31st December 2018 TEXTILE a) Cotton 14,124 (4%) b) Other Textiles 18,016 (6%) METALS a) Iron & Steel 10,722 (4%) 4,648 (2%) Amount % to Total b) Other Metals Industry Name (in INR Mn) Advance
Slide 36: Asset Quality
ASSET QUALITY (in INR Mn) GROSS NPA QTM & GROSS NPA % NET NPA QTM & NET NPA % 8,919 8,566 5,276 4,748 6,820 4,083 5,120 3,232 2,328 3,358 2.83% 3.03% 2.91% 2.41% 1.53% 1.71% 1.70% 1.74% 1.86% 1.30% 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18 31-Dec-18 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18 31-Dec-18 35
Slide 37: Asset Quality Position – Movement Over the Years
ASSET QUALITY POSITION – MOVEMENT OVER THE YEARS (RS IN MN) FY MAR - 15 FY MAR - 16 FY MAR - 17 FY MAR - 18 Q3 FY 2019 9M FY 2019 NPA Opening balance 2,931 3,358 5,120 6,820 8,479 8,565 Additions A 4,250 4,290 4,796 5,749 1,657 4,278 Recovery / SR * 2,118 734 905 1,623 461 1,513 Upgradations 227 546
Slide 38: Disclosure on Divergence in Asset Classification and Provisioning for NPAs
DISCLOSURE ON DIVERGENCE IN ASSET CLASSIFICATION AND PROVISIONING FOR NPAs In terms of RBI circular DBR.BP.BC.No.63/21.04.018/2016-17 dated 18th April 2017, banks are required to disclose the divergences in asset classification and provisioning consequent to RBI's annual supervisory process in their
Slide 39: RBI Dispensation
RBI DISPENSATION MSME Borrowers: In terms of RBI circular DBR.BP.BC.No.100/21.04.048/2017-18 dated 7th February, 2018 and DBR No.BP. BC.108/21.04.048/2017-18 dated 6th June 2018 permitted banks to continue the exposures to MSME borrowers to be classified as Standard Assets where the dues between Sep
Slide 40: Restructured Accounts
RESTRUCTURED ACCOUNTS Balance outstanding as on 31.12.2018 in respect of Restructured Standard borrowers No account has been restructured during 9M FY 2019 There were no sale to ARC on SR basis in the previous two years Type of Restructuring No. of Borrowers Amount (in INR Mn) Under CDR Mechanism Un
Slide 41: Investments – At a Glance
INVESTMENTS – AT AGLANCE Investments Breakup and Categorywise (in INR Mn) Particulars DEC 2018 DEC 2017 SLR Securities 74,508 72,443 Non-SLR Securities 3,590 3,869 Total Investments 78,098 76,312 Yield on Investments 6.94% 6.96% Investments Breakup: -A FS 18,394 (24%) 15,263 (20%) - HTM 59,704 (76%)
Slide 42: Branch Network
BRANCH NETWORK
Slide 43: Strong Presence in the South
STRONG PRESENCE IN THE SOUTH As of Dec 2018 - 616 branches. 552 branches are located in South India out of which 426 in Tamil Nadu No. of % of % of % of State Branches Deposits Advances Business Ta mi l na du 426 77 64 71 Andhra pra des h 39 3 8 5 Tel enga na 30 3 6 5 1 Ka rna ta ka 36 7 5 6 3 2 Ma
Slide 44: Shareholding Pattern
SHAREHOLDING PATTERN LIArFRIIT
Slide 45: A Well Diversified Investor Base
A WELL DIVERSIFIED INVESTOR BASE Position as on 31-Dec-2018 Major Institutional Shareholders NRI, SHAREHOLDERS HOLDING % 1.00 Others, HDFC Midcap Opportunities Fund 4.40 0.41 Life Insurance Corporation of India 3.68 Corp Bodies, FII, Smallcap World Fund INC (Capital Group) 3.41 8.15 0.31 GKFF Ventur
Slide 46: Corporate Governance
CORPORATE GOVERNANCE fm PNT ZN J1™ Iara
Slide 47: A Well Experienced and Strong Board
A WELL EXPERIENCED AND STRONG BOARD Shri. S. Mahalingam | B.Com (Honours), FCA Dr N. Kamakodi | B.Tech., MBA., PhD., CAIIB Independent Part-time Chairman M.D. & C.E.O. Mr. S. Mahalingam retired as CFO and ED of Tata Consultancy Services and was Dr. N. Kamakodi is serving as MD & CEO of the Bank from
Slide 48: 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 1 Executi
Slide 49: 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,DGM Mob : +91 9344303740 Email :ja