City Union Bank Limited · NSE:CUB
City Union Bank — Investor Presentation (March 2019)
44 slides from City Union Bank's investor presentation, March 2019
Slide 1: March 2019
MARCH 2019
Slide 2: 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 3: Table of Contents
TABLE OF CONTENTS 4 10 14 Overview Performance Highlights – Financial Performance & March 2019 Business Profile 37 39 41 Branch Network Shareholding Pattern Corporate Governance 3
Slide 4: Overview
@) OVERVIEW
Slide 5: 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 6: 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 7: City Union Bank - 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 8: Competitive Advantages
COMPETITIVE ADVANTAGES NETWORK STRONG TRACK RECORD Pan India presence with Continuous profitability and dividend payout in 650 branches all 110+ years of operations Strong presence in South India (586 branches) Business growth of 20%+ CAGR in last 10 years of which 455 are in Tamil Nadu alone ROBUST
Slide 9: 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 10: Performance Highlights – March 2019
PERFORMANCE HIGHLIGHTS – MARCH 2019
Slide 11: Q4 & FY 2019 Performance – A Snapshot
Q4 & FY 2019 PERFORMANCE – A SNAPSHOT Deposits increased by 17% from Rs.329 Bn to Rs.384 Bn Y-o-Y Advances registered a growth of 17% from Rs.282 Bn to Rs.331 BnY-o o-Y Total business grown by 17% to Rs.715 Bn from Rs.611 Bn Y-o-Y Gross Profit increased by 15% from Rs.2,943 Mn to Rs.3,378 Mn (Q4-Vs-
Slide 12: Q4 FY 2019 vs Q4 FY 2018 Performance – A Snapshot
Q4 FY 2019 VS Q4 FY 2018 PERFORMANCE – A SNAPSHOT (All figures in INR Mn) 384,480 330,652 715,132 96,982 17% 17% 17% 22% 328,526 282,386 610,912 79,567 Deposits Advances Total Business CASA 3,378 1,751 4,206 40.48% 15% 15% 14% 2,943 1,521 3,679 39.67% Gross Profit Net Profit Net Interest Cost to Inc
Slide 13: FY 2019 vs FY 2018 Performance – A Snapshot
FY 2019 VS FY 2018 PERFORMANCE – A SNAPSHOT (All figures in INR Mn) 384,480 330,652 715,132 96,982 17% 17% 17% 22% 328,526 282,386 610,912 79,567 Deposits Advances Total Business CASA 12,400 6,829 16,115 41.67% 3% 15% 13% 12,077 5,920 14,303 38.46% Gross Profit Net Profit Net Interest Cost to Income
Slide 14: Financial Performance & Business Profile
FINANCIAL PERFORMANCE & BUSINESS PROFILE
Slide 15: FY 19 vs FY 18 Performance - A Snapshot
FY 19 VS FY 18 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS FY 2019 FY 2018 INC / (DEC) Growth Growth % 9M FY 2019 Deposits 384,480 328,526 55,954 17% 355,040 Advances 330,652 282,386 48,266 17% 306,369 Total Business 715,132 610,912 104,220 17% 661,409 Demand Deposits 32,1
Slide 16: Q4 FY 19 vs Q4 FY 18 Performance - A Snapshot
Q4 FY 19 VS Q4 FY 18 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q4 FY 2019 Q4 FY 2018 INC / (DEC) Growth % Q3 FY 2019 Net Interest Income 4,206 3,680 526 14% 4,181 Other Income 1,469 1,198 271 23% 1,198 Operating Expenses 2,297 1,935 362 19% 2,311 Gross Profit 3,378 2,943
Slide 17: FY 19 vs FY 18 Performance - A Snapshot
FY 19 VS FY 18 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS FY 2019 FY 2018 INC / (DEC) Growth % Net Interest Income 16,115 14,303 1,812 13% Other Income 5,144 5,321 -177 -ve Operating Expenses 8,859 7,547 1,312 17% Gross Profit 12,400 12,077 323 3% Provisions & Contingenci
Slide 18: Provisions & Contingencies – Breakup
PROVISIONS & CONTINGENCIES – BREAKUP (in INR Mn) PARTICULARS Q4 FY 19 Q4 FY 18 FY 18-19 FY 17-18 Provision for: - Tax 720 560 2,420 1,980 - Bad Debts 810 550 2,700 3,030 - Standard Assets 153 4 215 15 - Depn on Investments - 148 160 855 - Depn on Shifting - - 65 102 - Restructuring / FITL -56 - -96
Slide 19: Q4 FY 19 vs Q4 FY 18 – Income and Expenses Breakup
Q4 FY 19 VS Q4 FY 18 – 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 % 2019 2018 2019 2018 Interest on Loans 8,384 7,236 16% Int Exp on Deposits 5,564 4,821 15% Interest on Investments 1,349 1
Slide 20: FY 19 vs FY 18 – Income and Expenses Breakup
FY 19 VS FY 18 – INCOME AND EXPENSES BREAKUP (in INR Mn) INTEREST INCOME BREAKUP INTEREST EXPENSES BREAKUP FY FY FY FY PARTICULARS Growth % PARTICULARS Growth % 2019 2018 2019 2018 Interest on Loans 31,777 28,404 12% Int Exp on Deposits 21,080 19,271 9% Interest on Investments 5,536 5,228 6% Other I
Slide 21: Strong Deposits and Advances Growth
STRONG DEPOSITS AND ADVANCES GROWTH (in INR Mn) DEPOSITS ADVANCES 12% 15% CAGR CAGR 3,30,652 3,84,480 2,82,386 3,01,157 3,28,526 2,41,125 2,71,581 2,12,531 2,40,750 1,80,885 31-MAR-2015 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-MAR-2019 31-MAR-2015 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-MAR-2019 BUSINE
Slide 22: Income Growth Over the Years
INCOME GROWTH OVER THE YEARS… (in INR Mn) NET INTEREST INCOME GROWTH OTHER INCOME GROWTH 16% 13% CAGR CAGR 16,115 5,321 5,144 14,303 4,840 11,988 4,041 4,100 9,810 8,074 31-MAR-2015 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-MAR-2019 31-MAR-2015 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-MAR-2019 CEB GROWTH
Slide 23: Key Business Indicators
KEY BUSINESS INDICATORS PARTICULARS Q4 FY 19 Q4 FY 18 FY 18-19 FY 17-18 Cost of Deposits 6.27% 6.22% 6.17% 6.29% Yield on Advances 11.07% 11.19% 10.95% 11.46% Yield on Investments 6.96% 6.90% 6.95% 6.95% Net Interest Margin 4.40% 4.36% 4.32% 4.42% Cost to Income 40.48% 39.67% 41.67% 38.46% Cost of F
Slide 24: Key Business Ratios – Yearly Trends
KEY BUSINESS RATIOS – YEARLY TRENDS NET INTEREST MARGIN RETURN ON ASSETS 5.00% 1.70% 1.64% 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-MAR-15 31-MAR-16 31-MAR-17 31-MAR-18 31-MAR-19 31-MAR-15 31-MAR-16 31-MAR-17 31-MAR-18 31-MA
Slide 25: 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 10.95 10 8.44 8.37 8.15 7.98 8.11 7.73 7.62 8 6.94 6.82 6.29 6.17 6 4 2 0 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Spread between cost of deposits and
Slide 26: Efficiency
EFFICIENCY COST INCOME RATIO (%) CASA RATIO (%) 42.83 25.22 23.37 24.22 41.67 20.37 40.94 19.23 40.10 38.46 31-Mar-2015 31-Mar-2016 31-Mar-2017 31-Mar-2018 31-Mar-2019 31-Mar-2015 31-Mar-2016 31-Mar-2017 31-Mar-2018 31-Mar-2019 BUSINESS PER EMPLOYEE PROFIT PER EMPLOYEE (in INR Mn) (in INR Mn) 129.60
Slide 27: 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 28: Loan Book Sectoral Deployment – Position as on 31.03.2019
LOAN BOOK SECTORAL DEPLOYMENT – POSITION AS ON 31.03.2019 (in INR Mn) Infrastructure 3,534 Loans collateralized by Deposits JL NonAgriculture 5,829 3,506 Retail Traders 11,371 2% 1% NBFC Other Personal Loans 3% 2,494 13,177 4% Commercial Real Estate 6% 19,548 Housing Loans 6% 21,091 31% M S M E 102,
Slide 29: Loan Book Sectoral Deployment – Secured & Unsecured Advances
LOAN N BOOK SECTORAL DEPLOYMENT – POSITION AS ON 31.03.2019 (in INR Mn) SECURED & UNSECURED ADVANCES Particulars Amount (INR Mn) Q3 FY 2019 Secured Loans 327,845 99% Unsecured Loans 2,807 1% Total 330,652 100% Trading & MSME loans earning higher yield constitute about 49% Diversified credit portfoli
Slide 30: 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 2019 TEXTILE a) Cotton 15,447 (5%) b) Other Textiles 19,584 (6%) METALS a) Iron & Steel 11,288 (3%) Amount % to Total b) Other Metals 4,926 (1%) Industry Name (in INR Mn) Advances P
Slide 31: Asset Quality
ASSET QUALITY (in INR Mn) GROSS NPA QTM & GROSS NPA % NET NPA QTM & NET NPA % 9,771 8,566 5,915 4,748 6,820 4,083 5,120 3,232 3,358 2,328 2.83% 3.03% 2.95% 2.41% 1.53% 1.71% 1.70% 1.81% 1.86% 1.30% 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18 31-Mar-19 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18 31-Mar-19 31
Slide 32: 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 Q4 FY 2019 FY MAR-19 NPA Opening balance 2,931 3,358 5,120 6,820 8,919 8,565 Additions A 4,250 4,290 4,796 5,749 2,044 6,322 Recovery / SR * 2,118 734 905 1,623 467 1,980 Upgradations 227 546 556 433
Slide 33: Disclosure on Divergence in Asset Classification and Provisioning for NPAs
DISCLOSURE ON DIVERGENCE IN ASSET CLASSIFICATION AND PROVISIONING FOR NPAs Divergence in Asset Classification: In terms of RBI circular No.DBR.BP.BC.No.32/21.04.018/2018-19 dated April 1, 2019 banks are required to disclose the divergence in asset classification and provisioning consequent to RBI's
Slide 34: RBI Dispensation
RBI DISPENSATION MSME Borrowers: In terms of RBI circular DBR.BP.BC.No.100 100/21.04.048/2017-18 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
Slide 35: Restructured Accounts
RESTRUCTURED ACCOUNTS Balance outstanding as on 31.03.2019 in respect of Restructured Standard borrowers Type of Restructuring No. of Borrowers Amount (in INR Mn) SME 44 361 NSME 53 137 Total 97 497 The above disclosure is in respect of Restructured Standard Accounts excluding NPA Restructured Stand
Slide 36: Investments – At a Glance
INVESTMENTS – AT AGLANCE Investments Breakup and Categorywise (in INR Mn) Particulars MAR 2019 MAR 2018 SLR Securities 74,764 76,380 Non-SLR Securities 3,869 3,770 Total Investments 78,633 80,150 Yield on Investments 6.95% 6.95% Investments Breakup: -A FS 15,396 (20%) 20,129 (25%) - HTM 63,237 (80%)
Slide 37: Branch Network
@) BRANCH NETWORK
Slide 38: Strong Presence in the South
STRONG PRESENCE IN THE SOUTH As of Mar 2019 - 650 branches. 586 branches are located in South India out of which 455 in Tamil Nadu No. of % of % of % of State Branches Deposits Advances Business Ta mi l nadu 455 77 63 70 Andhra pra des h 39 2 9 5 Tel enga na 31 3 6 5 1 Ka rnata ka 40 7 5 6 3 2 Ma ha
Slide 39: Shareholding Pattern
@) SHAREHOLDING PATTERN
Slide 40: A Well Diversified Investor Base
A WELL DIVERSIFIED INVESTOR BASE Position as on 31-Mar-2019 Major Institutional Shareholders NRI, SHAREHOLDERS HOLDING % 1.01 HDFC Midcap Opportunities Fund 4.39 Others, Life Insurance Corporation of India 3.66 0.83 GKFF Ventures (Argonaut Ventures) 2.75 Corp Bodies, FII, 8.15 Smallcap World Fund IN
Slide 41: Corporate Governance
@) CORPORATE GOVERNANCE
Slide 42: 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. Mr. R. Mohan is a bachelor of Science, Master of Business Administration Dr. N. Kamakodi is serving as MD & CEO of the Bank from May 2011. and a CAI
Slide 43: 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 44: City Union Bank Ltd.
CITY UNION BANK LTD. Regd.Office :149,TSR Big Street,Kumbakonam Kumbakonam – 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,D