City Union Bank Limited · NSE:CUB
City Union Bank — Q4 FY2022 Earnings Presentation
46 slides from City Union Bank's earnings presentation, May 27, 2022
Slide 1: City Union Bank Limited – Investor Presentation Filing Letter
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 ‘TRUST AND EXCELLENCE SINCE 1904 E-mail : shares@cityunionbank.com Website: www.cityunionbank.c
Slide 2: City Union Bank – March 2022
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 2022 Business Profile 38 40 42 Branch Network 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 727 branches Continuous profitability and dividend payout in all Strong presence in South India (644 branches) 116+ years of operations of which 495 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 2022
PERFORMANCE HIGHLIGHTS – MARCH 2022 10
Slide 12: Q4 FY22 / FY 21-22 Performance – A Snapshot
Q4 FY 22 / FY 21-22 PERFORMANCE – A SNAPSHOT Deposits increased by 7% from Rs.445 Bn to Rs.477 Bn Y-o-Y Advances registered a growth of 11% from Rs.370 Bn to Rs.412 Bn Y-o-Y Total business grown by 9% from Rs.816 Bn to Rs.888 Bn Y-o-Y Gross Profit increased by 47% from Rs.2,987 Mn to Rs.4,398 Mn (Q4
Slide 13: Q4 FY22 vs Q4 FY21 Performance – A Snapshot
Q4 FY 22 VS Q4 FY 21 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 4,398 2,089 5,007 37.49% 47% 88% 17% % 2,987 1,112 4,285 49.17% Gross Profit Net Profit Net Interest Cost to Income Income 1.4
Slide 14: FY22 vs FY21 Performance – A Snapshot
FY 22 VS FY 21 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 1.35% 1
Slide 15: Financial Performance & Business Profile
FINANCIAL PERFORMANCE & BUSINESS PROFILE 14
Slide 16: 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 % Q3 FY 22 Deposits 476,897 445,373 31,524 7% 467,217 Advances 411,560 370,206 41,354 11% 383,871 Total Business 888,457 815,579 72,878 9% 851,088 Demand Deposits 46,193 37
Slide 17: Q4 FY22 vs Q4 FY21 Performance – A Snapshot
Q4 FY 22 VS Q4 FY 21 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q4 FY 22 Q4 FY 21 INC / (DEC) Growth % Q3 FY 22 Net Interest Income 5,007 4,285 722 17% 4,900 Other Income 2,029 1,591 438 28% 1,600 Operating Expenses 2,638 2,889 -251 -9% 2,804 Gross Profit 4,398 2,987 1411
Slide 18: FY22 vs FY21 Performance – A Snapshot
FY 22 VS FY 21 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS FY 22 FY 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 & Contingencies 8,35
Slide 19: Provisions & Contingencies – Breakup
PROVISIONS & CONTINGENCIES – BREAKUP (in INR Mn) PARTICULARS Q4 FY 22 Q4 FY 21 FY 21-22 FY 20-21 Provision for: - Tax 600 - 650 2,250 1,000 - Bad Debts 1,150 4,860 5,535 5,990 - Contingency / Covid 19 450 - 3,090 - 80 310 - Standard Assets 100 425 550 1,045 - Restructuring / FITL - 40 107 265 - Othe
Slide 20: Q4 FY22 vs Q4 FY21 – Income and Expenses Breakup
Q4 FY 22 VS Q4 FY 21 – 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 % 22 21 22 21 Interest on Loans 8,702 8,261 5% Int Exp on Deposits 5,153 5,383 -4% Interest on Investments 1,745 1,436 22%
Slide 21: 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 22: Deposits and Advances Growth – Over the Years
DEPOSITS AND ADVANCES GROWTH – OVER THE YEARS (in INR Mn) DEPOSITS ADVANCES 10% 11% CAGR 4,76,897 CAGR 4,45,370 3,84,480 4,08,325 4,11,560 3,45,762 3,70,206 3,28,526 3,30,652 2,82,386 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-MAR-2022 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-MAR-2
Slide 23: Income Growth Over the Years
INCOME GROWTH OVER THE YEARS… (in INR Mn) NET INTEREST INCOME GROWTH OTHER INCOME GROWTH 10% 10% CAGR CAGR 7,591 6,799 6,887 18,297 19,165 16,115 16,752 5,321 5,144 14,303 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-MAR-2022 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 31-MAR-2022 CEB GROW
Slide 24: Key Business Indicators
KEY BUSINESS INDICATORS PARTICULARS Q4 FY 22 Q4 FY 21 FY 21-22 FY 20-21 Cost of Deposits 4.54% 5.05% 4.68% 5.36% Yield on Advances 9.26% * 9.19% 9.36% 9.91% Yield on Investments 5.70% 5.76% 5.71% 5.86% Net Interest Margin 4.01% * 3.72% 3.98% 4.00% Cost to Income 37.49% * 49.17% 40.37% 41.72% Cost of
Slide 25: 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% 1.35% 3.98% 4.00% 3.98% 1.40% 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-MAR-22 31-MAR-18 31-MAR-19 31-MAR-20 31-
Slide 26: 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 9.36 8.44 8.37 8.15 8.11 7.62 8 6.82 6.29 6.17 6.20 6 5.36 4.68 4 2 0 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 22 Spread between cost of deposits and yi
Slide 27: Efficiency
EFFICIENCY COST INCOME RATIO (%) CASA RATIO (%) 42.47 32.56 42.12 29.15 41.72 24.22 25.22 24.97 40.37 38.46 31-Mar-2018 31-Mar-2019 31-Mar-2020 31-Mar-2021 31-Mar-2022 31-Mar-2018 31-Mar-2019 31-Mar-2020 31-Mar-2021 31-Mar-2022 BUSINESS PER EMPLOYEE PROFIT PER EMPLOYEE (in INR Mn) (in INR Mn) 165.45
Slide 28: 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 & Re-pricing possible at short intervals Demand Loan thus reducing interest rate risk 62% Loan Book Products C
Slide 29: Loan Book Sectoral Deployment – Position as on 31.03.2022
LOAN BOOK SECTORAL DEPLOYMENT – POSITION AS ON 31.03.2022 (in INR Mn) Loans collateralized by Deposits 6,871 Large Industries NBFC 6,563 4,180 Personal Loans 1% Infrastructure 9,345 Retail Traders 2% 2% 3,484 12,385 3% Others 16,087 4% Housing Loan 39% 19,987 5% SECTORAL MSME CRE DEPLOYMENT 160,714
Slide 30: Loan Book Sectoral Deployment – Secured & Unsecured Advances
LOAN N BOOK SECTORAL DEPLOYMENT – POSITION AS ON 31.03.2022 (in INR Mn) SECURED & UNSECURED ADVANCES Particulars Amount (INR Mn) (%) Secured Loans 408,882 99% Unsecured Loans 2,678 1% Total 411,560 100% Trading & MSME loans constitute about 51% Diversified credit portfolio reduces credit risk and Lo
Slide 31: 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 2022 TEXTILE a) Cotton 18,224 (4%) b) Other Textiles 23,832 (6%) METALS a) Iron & Steel 9,568 (2%) Amount % to Total Industry Name b) Other Metals 7,412 (2%) (in INR Mn) Advances APER
Slide 32: Loan Book – Driver to Growth – Q4 FY22
LOAN BOOK - DRIVER TO GROWTH – Q4 FY 22 In the last few quarters the bank has concentrated more on Gold Loan portfolio which is increased by 38% from Rs.65,405 Mn in FY 21 to Rs. 90,033 Mn in FY 22. (in INR Mn) GOLD LOAN PORTFOLIO Mar Mar-21 Dec-21 Mar-22 Gold Loan – Agriculture 30,504 51,186 58,1
Slide 33: Asset Quality
ASSET QUALITY (in INR Mn) GROSS NPA QTM & GROSS NPA % NET NPA QTM & NET NPA % 19,986 18,932 19,332 12,959 11,911 10,752 14,134 5.21% 5.11% 4.70% 7,785 9,771 8,566 5,915 4.09% 4,748 3.44% 2.97% 2.95% 2.29% 3.03% 1.81% 1.70% 2.95% 31-Mar-18 31-Mar-19 31-Mar-20 31-Mar-21 31-Dec-21 31-Mar-22 31-Mar-18 3
Slide 34: 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 Q4 FY 22 FY MAR-22 NPA Opening balance 5,120 6,820 8,565 9,771 14,134 19,986 18,932 Additions A 4,796 5,749 6,322 11,104 11,131 2,208 12,757 Recovery made 905 1,623 1,980 1,644 1,950 1,
Slide 35: Asset Quality – Gold Loan Portfolio
ASSET QUALITY – GOLD LOAN PORTFOLIO (In INR MN) No. of A/cs Balance Gold Loan –Total 742,603 90,033 Of which, - Standard Accounts 742,017 89,957 - N PA 586 76 Gross NPA 19,332 % of Gold Loan NPA to Gold Loan Portfolio 0.08% % of Gold Loan NPA to Gross NPA 0.39% 34
Slide 36: Restructured Accounts
RESTRUCTURED ACCOUNTS Quarterwise balance outstanding in respect of Restructured Standard borrowers (In INR MN) Mar-21 Jun-21 Sep-21 Dec-21 Mar-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 305 12319 299 12629 3
Slide 37: Security Receipts
SECURITY RECEIPTS During Q4 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-20 2474 Dec-20 1444 Mar-21 1429 Jun-21 1308 Sep-21 1177 Dec-21 1118 Mar-22 917 In the FY 13-14 & 14-15, we had sold some of the NP
Slide 38: Investments – At a Glance
INVESTMENTS – AT AGLANCE Investments Breakup and Categorywise (in INR Mn) Particulars MAR 2022 MAR 2021 SLR Securities 121,365 93,328 Non-SLR Securities 1,578 1,904 Total Investments 122,943 95,232 Yield on Investments 5.71% 5.86% Investments Breakup: -A FS 16,844 (14%) 10,899 (11%) - HTM 106,099 (8
Slide 39: Branch Network
BRANCH NETWORK 38
Slide 40: Strong Presence in the South
STRONG PRESENCE IN THE SOUTH As of Mar 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 Tamil nadu 495 81 65 73 Karnata ka 41 6 5 6 Andhra prades h 49 2 8 5 1 Telengana 35 3 6 4 3 2 Mahara sht
Slide 41: Shareholding Pattern
SHAREHOLDING PATTERN 40
Slide 42: A Well Diversified Investor Base
A WELL DIVERSIFIED INVESTOR BASE Position as on 31-Mar-2022 Major Institutional Shareholders SHAREHOLDERS HOLDING % QIB, NRI, HDFC Midcap Opportunities Fund 4.48 6.74 0.88 Franklin India Equity Savings Fund 4.42 Corp Bodies, Others, Life Insurance Corporation of India 3.20 2.77 1.37 DSP Arbitrage Fu
Slide 43: Corporate Governance
CORPORATE GOVERNANCE 42
Slide 44: 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 Dr. N. Kamakodi is serving as MD & CEO of the Bank from May 20
Slide 45: 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 46: 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