City Union Bank Limited · NSE:CUB
City Union Bank — Q3 FY2022 Earnings Presentation
58 slides from City Union Bank's earnings presentation, Feb 4, 2022
Slide 1: Exchange filing cover letter - Investor presentation Q3 FY 2022
i) 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 8 ce E-mail : shares@cityunionbank.com Website : www.cityunionbank.com C.0/Shares/LR-5/2021-22
Slide 2: City Union Bank - December 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 15 Overview Performance Highlights – Financial Performance & December 2021 Business Profile 42 44 52 54 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 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) 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 - December 2021
PERFORMANCE HIGHLIGHTS – DECEMBER 2021 10
Slide 12: Q3 FY 22 / 9M FY 22 Performance - A Snapshot
Q3 FY 22 / 9M FY 22 PERFORMANCE – A SNAPSHOT Deposits increased by 8% from Rs.433 Bn to Rs.467 Bn Y-o-Y Advances registered a growth of 5% from Rs.365 Bn to Rs.384 Bn Y-o-Y Total business grown by 7% from Rs.798 Bn to Rs.851 Bn Y-o-Y Gross Profit decreased to Rs.3,696 Mn from Rs.4,484 Mn (Q3-Vs Vs-Q
Slide 13: Q3 FY 22 vs Q3 FY 21 Performance - A Snapshot
Q3 FY 22 VS Q3 FY 21 PERFORMANCE – A SNAPSHOT (in INR Mn) 467,217 383,871 851,088 139,184 8% 5% 7% 17% 432,883 365,037 797,920 118,984 Deposits Advances Total Business CASA 3,696 1,961 4,900 43.13% 15% 1% % 4,484 1,699 4,891 36.73% Gross Profit Net Profit Net Interest Cost to Income Income 1.36% 12.
Slide 14: 9M FY 22 vs 9M FY 21 Performance - A Snapshot
9M FY 22 VS 9M FY 21 PERFORMANCE – A SNAPSHOT (in INR Mn) 467,217 383,871 851,088 139,184 8% 5% 7% 17% 432,883 365,037 797,920 118,984 Deposits Advances Total Business CASA 11,555 5,512 14,158 41.41% 14% 1% % 11,691 4,816 14,012 39.45% Gross Profit Net Profit Net Interest Cost to Income Income 1.32%
Slide 15: FY 21 vs FY 20 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 14,678 5,928 18,297 41.72% 7% 24% 9% % 13,734 4,763 16,752 42.47% Gross Profit Net Profit Net Interest Cost to Income Income 1.15% 10
Slide 16: Financial Performance & Business Profile
FINANCIAL PERFORMANCE & BUSINESS PROFILE 15
Slide 17: Q3 FY 22 vs Q3 FY 21 Performance - Financial Performance
Q3 FY 22 VS Q3 FY 21 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q3 FY 22 Q3 FY 21 INC / (DEC) Growth Growth % Q2 FY 22 Deposits 467,217 432,883 34,334 8% 463,161 Advances 383,871 365,037 18,834 5% 380,122 Total Business 851,088 797,920 53,168 7% 843,283 Demand Deposits 41
Slide 18: Q3 FY 22 vs Q3 FY 21 Performance - Profit and Loss
Q3 FY 22 VS Q3 FY 21 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q3 FY 22 Q3 FY 21 INC / (DEC) Growth % Q2 FY 22 Net Interest Income 4,900 4,890 10 1% 4,783 Other Income 1,600 2,198 -598 - 2,027 Operating Expenses 2,804 2,604 200 8% 2,759 Gross Profit 3,696 4,484 -788 - 4,
Slide 19: 9M FY 22 vs 9M FY 21 Performance
9M FY 22 VS 9M FY 21 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS 9M FY 22 9M FY 21 INC / (DEC) Growth % Net Interest Income 14,158 14,012 146 1% Other Income 5,562 5,296 266 5% Operating Expenses 8,165 7,617 548 7% Gross Profit 11,555 11,691 -136 - Provisions & Contingenci
Slide 20: FY 21 vs FY 20 Performance - Balance Sheet Metrics
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: FY 21 vs FY 20 Performance - Profit and Loss
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 6,888 7,119 -231 - Operating Expenses 10,506 10,137 369 4% Gross Profit 14,678 13,734 944 7% Provisions & Contingencies
Slide 22: Provisions & Contingencies - Breakup
PROVISIONS & CONTINGENCIES – BREAKUP (in INR Mn) PARTICULARS Q3 FY 22 Q3 FY 21 9M FY 22 9M FY 21 FY 20-21 Provision for: - Tax 500 700 1,650 1,650 1,000 - Bad Debts 875 310 4,385 1,130 5,990 - Covid 19 300 1,250 (530) 3,400 310 - Standard Assets 10 500 450 620 1,045 - Restructuring / FITL - 175 108
Slide 23: Q3 FY 22 vs Q3 FY 21 - Income and Expenses Breakup
Q3 FY 22 VS Q3 FY 21 – 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 % 22 21 22 21 Interest on Loans 8,646 8,906 - Int Exp on Deposits 5,272 5,463 - Interest on Investments 1,656 1,470 13% Oth
Slide 24: 9M FY 22 vs 9M FY 21 - Income and Expenses Breakup
9M FY 22 VS 9M FY 21 – 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 % 22 21 22 21 Interest on Loans 25,838 26,817 - Int Exp on Deposits 16,044 16,965 - Interest on Investments 4,560 4,392 4%
Slide 25: 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 26: Strong Deposits and Advances Growth
STRONG DEPOSITS AND ADVANCES GROWTH (in INR Mn) DEPOSITS ADVANCES 10% 11% CAGR 4,45,370 4,67,217 CAGR 3,84,480 4,08,325 3,28,526 3,70,206 3,83,871 3,30,652 3,45,762 2,82,386 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-DEC-2021 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-DEC-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 7,119 6,888 14,303 14,158 (9M) 5,321 5,144 5,562 (9M) 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-DEC-2021 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-DEC-202
Slide 28: Key Business Indicators
KEY BUSINESS INDICATORS PARTICULARS Q3 FY 22 Q3 FY 21 9M FY 22 9M FY 21 FY 20-21 Cost of Deposits 4.58% 5.16% 4.72% 5.46% 5.36% Yield on Advances 9.29% 9.87% 9.39% 10.16% 9.91% Yield on Investments 5.76% 5.79% 5.71% 5.89% 5.86% Net Interest Margin 4.00% 4.16% 3.97% 4.09% 4.00% Cost to Income 43.13%
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% 3.97% 1.40% 1.32% 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 31-DEC-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 9.39 8.44 8.37 8.15 8.11 7.62 8 6.82 6.29 6.17 6.20 6 5.36 4.72 4 2 0 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Dec 21 Spread between cost of deposits and yi
Slide 31: Efficiency
EFFICIENCY COST INCOME RATIO (%) CASA RATIO (%) 42.47 41.72 29.15 29.79 41.67 41.41 24.22 25.22 24.97 38.46 31-Mar-2018 31-Mar-2019 31-Mar-2020 31-Mar-2021 31-Dec-2021 31-Mar-2018 31-Mar-2019 31-Mar-2020 31-Mar-2021 31-Dec-2021 BUSINESS PER EMPLOYEE PROFIT PER EMPLOYEE (in INR Mn) (in INR Mn) 155.50
Slide 32: 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 Term Loan 38% Cash Credit & Re-pricing possible at short intervals Demand Loan thus reducing interest rate risk 61% Loan Book Products C
Slide 33: Loan Book Sectoral Deployment - Position as on 31.12.2021
LOAN BOOK SECTORAL DEPLOYMENT – POSITION AS ON 31.12.2021 (in INR Mn) Loans collateralized by Deposits 6,029 Large Industries 6,292 Infrastructure 3,032 Personal Loans 1% NBFC 8,513 Retail Traders 2% 2% 3,420 10,996 3% Others 18,327 5% Housing Loan 38% 19,907 5% SECTORAL MSME CRE DEPLOYMENT 147,006
Slide 34: Loan Book Sectoral Deployment - Secured & Unsecured Advances
LOAN N BOOK SECTORAL DEPLOYMENT – POSITION AS ON 31.12.2021 (in INR Mn) SECURED & UNSECURED ADVANCES Particulars Amount (INR Mn) (%) Secured Loans 381,371 99% Unsecured Loans 2,500 1% Total 383,871 100% Trading & MSME loans constitute about 52% Diversified credit portfolio reduces credit risk and Lo
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 2021 TEXTILE a) Cotton 17,034 (4%) b) Other Textiles 22,741 (6%) METALS a) Iron & Steel 8,496 (2%) Amount % to Total Industry Name b) Other Metals 6,889 (2%) (in INR Mn) Advances A
Slide 36: Loan Book - Driver to Growth - Q3 FY 22
LOAN BOOK - DRIVER TO GROWTH – Q3 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 48% from Rs.55,328 Mn in Q3 FY 21 to Rs. 81,697 Mn in Q3 FY 22. (in INR Mn) GOLD LOAN PORTFOLIO Dec
Slide 37: Asset Quality
ASSET QUALITY (in INR Mn) GROSS NPA QTM & GROSS NPA % NET NPA QTM & NET NPA % 21,193 12,941 12,959 19,986 18,932 10,752 14,134 7,785 5.58% 5.21% 9,771 5.11% 5,915 8,565 3.48% 3.44% 4,748 2.97% 4.09% 2.29% 1.70% 1.81% 3.03% 2.95% 31-Mar-18 31-Mar-19 31-Mar-20 31-Mar-21 30-Sep-21 31-Dec-21 31-Mar-18 3
Slide 38: Asset Quality Position - Movement Over the Years
ASSET QUALITY POSITION – MOVEMENT OVER THE YEARS (In INR MN) FY MAR-17 FY MAR-18 MAR FY MAR-19 FY MAR-20 FY MAR-21 Q3 FY 22 9M FY 22 NPA Opening balance 5,120 6,820 8,565 9,771 14,134 21,193 18,932 Additions A 4,796 5,749 6,322 11,104 11,131 2,753 10,549 Recovery made 905 1,623 1,980 1,644 1,950 1,3
Slide 39: Asset Quality - Gold Loan Portfolio
ASSET QUALITY – GOLD LOAN PORTFOLIO (In INR MN) No. of A/cs Balance Gold Loan –Total 737,707 81,697 Of which, - Standard Accounts 736,849 81,577 - N PA 858 120 Gross NPA 19,986 % of Gold Loan NPA to Gold Loan Portfolio 0.15% % of Gold Loan NPA to Gross NPA 0.60% 38
Slide 40: Restructured Accounts
RESTRUCTURED ACCOUNTS During Q3 FY 22, we have restructured 9 standard borrower accounts to the tune of Rs.137 Mn under MSME. Quarterwise balance outstanding in respect of Restructured Standard borrowers (In INR MN) Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Type of Restructuring No. of No. of No. of No. of
Slide 41: Security Receipts
SECURITY RECEIPTS During Q3 FY 22, 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-19 3250 Mar-20 2474 Dec-20 1444 Mar-21 1429 Jun-21 1308 Sep-21 1177 Dec-21 1118 In the FY 13-14 & 14-15, we had sold some of the N
Slide 42: Investments - At a Glance
INVESTMENTS – AT AGLANCE Investments Breakup and Categorywise (in INR Mn) Particulars DEC 2021 DEC 2020 SLR Securities 118,657 93,850 Non-SLR Securities 2,143 1,989 Total Investments 120,800 95,839 Yield on Investments 5.72% 5.89% Investments Breakup: -A FS 18,150 (15%) 6,172 (6%) - HTM 102,650 (85%
Slide 43: Branch Network
BRANCH NETWORK 42
Slide 44: Strong Presence in the South
STRONG PRESENCE IN THE SOUTH As of Dec 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 Ta mi l na du 486 81 66 74 Ka rna ta ka 41 6 5 5 Andhra pra des h 45 2 7 5 1 Telenga na 34 3 6 4 3 2 Mah
Slide 45: Digital Banking Initiatives
DIGITAL BANKING INITIATIVES 44
Slide 46: Mapping Digital Landscapes
Mapping Digital Landscapes Staying Ahead of Times 45
Slide 47: Customer Onboarding DIY
Customer Onboarding DIY Onboarding Customers to City Union Bank Retail Customers | Corporate Customers | Merchants Educational Institutions | Hospitals Savings Account & AI Based Insta Insta Jewel Loan Wealth Mgmt / Insurance - LIC Current Account Loan ASBA / 3 in1 A/c / Star Health MFs IT Solutions
Slide 48: New Gen Digital Products
New Gen Digital Products 1 MultilingualVoice BOT 2 AI Based Digital lending 3 Video KYC (Current & SavingsA/c) New Gen Digital 4 CUB Keychain / Products CUBFit Debit Card 5 Connected Banking Services Merchant QR / UPI Key Digital Products to cater 6 Scan & Pay Retail / Corporate / New Customers CUB
Slide 49: Go Digital: Engage and Transact Digitally
Go Digital: Engage and Transact Digitally E- FundTransfer (IMPS / RTGS / NEFT / Wallet UPI) Whatsapp Cardless / ICCW (UPI Based) Banking Withdrawal Outline Stock 24/7 Cash deposit /Withdrawal Statement at ourATMs Online Investment & Insurance FASTag (ASBA,3 in 1 a/c , Mutual Funds , LIC & Star Healt
Slide 50: Retail Internet & Mobile Banking
Retail Internet & Mobile Banking Deposit Services 03 Fund Serrvices Accounts Services 02 01 • RD / FD Opening / Receipt Download Investments • Corporate Deposit through Internet Banking • Cardless Withdrawal • Pre-Closure / Partial 04 • CUB Credit card Payment • Summary View operative / Deposit with
Slide 51: Corporate Internet & Mobile Banking
Corporate Internet & Mobile Banking 01 Accounts Services 02 Fund Services 03 Other Services • SummaryView operativeAccounts • Positive Pay • 24*7 Transfers – OWN / CUB / • Cheque book • Transaction history – Request period NEFT / RTGS / NEFT / IMPS • Tax Payment • Bulk Transfers CUB/NEFT view/downlo
Slide 52: CUB Offers CUBFit Watch & Keychain Debit Card
CUB Offers CUBFit Watch & Keychain Debit Card Key Features Customers can ManageTransactions on their own by a) Enable & Disable the wearable to make payment Contactless as and when needed using CUB’s Net Banking or Mobile Banking Smart b)Setting per day limit,per transaction limit Payments from CUB’
Slide 53: Shareholding Pattern
SHAREHOLDING PATTERN 52
Slide 54: A Well Diversified Investor Base
A WELL DIVERSIFIED INVESTOR BASE Position as on 31-Dec-2021 Major Institutional Shareholders SHAREHOLDERS HOLDING % QIB, NRI, 7.24 0.81 Franklin India Equity Savings Fund 4.68 HDFC Midcap Opportunities Fund 4.47 Corp Bodies, Others, SBI ETF 3.93 1.30 2.59 Axis Mutual Fund 3.42 HDFC Life Insurance Co
Slide 55: Corporate Governance
CORPORATE GOVERNANCE 54
Slide 56: 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 57: 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 58: City Union Bank Ltd - Investor Contact
CITY UNION BANK LTD Regd.Office :149,TSR Big Street,Kumbakonam Street, – 612001,Tamilnadu. 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