City Union Bank Limited · NSE:CUB
City Union Bank — Q1 FY2022 Earnings Presentation
53 slides from City Union Bank's earnings presentation, Aug 6, 2021
Slide 1: City Union Bank Limited – Investor presentation cover letter
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 elite E-mail : shares@cityunionbank.com — Website : www.cityunionbank.com C.O/Shares/LR-5/2021-22
Slide 2: City Union Bank – June 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 14 Overview Performance Highlights – Financial Performance & June 2021 Business Profile 39 41 47 49 Branch Network Technology 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) 115+ 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 – June 2021
PERFORMANCE HIGHLIGHTS – JUNE 2021 10
Slide 12: Q1 FY 2022 Performance – A Snapshot
Q1 FY 2022 PERFORMANCE – A SNAPSHOT Deposits increased by 8.73% from Rs.410 Bn to Rs.446 Bn Y-o-Y Y Advances registered a growth of 5.39% from Rs.345 Bn to Rs.364 Bn Y-o-Y Total business grown by 7.20% from Rs.756 Bn to Rs.810 Bn Y-o--Y Gross Profit increased by 8% to Rs.3,830 Mn from Rs.3,560 Mn (Q
Slide 13: Q1 FY 2022 vs Q1 FY 2021 Performance – A Snapshot
Q1 FY 2022 VS Q1 FY 2021 PERFORMANCE – A SNAPSHOT (in INR Mn) 446,059 363,955 810,014 122,991 9% 5% 7% 22% 410,259 345,356 755,615 100,976 Deposits Advances Total Business CASA 3,830 1,730 4,476 40.46% 8% 12% 2% % 3,560 1,540 4,369 40.42% Gross Profit Net Profit Net Interest Cost to Income Income 1.
Slide 14: FY 2021 vs FY 2020 Performance – A Snapshot
FY 2021 VS FY 2020 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 1.1
Slide 15: Financial Performance & Business Profile
FINANCIAL PERFORMANCE & BUSINESS PROFILE 14
Slide 16: Q1 FY 22 vs Q1 FY 21 Performance – A Snapshot
Q1 FY 22 VS Q1 FY 21 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q1 FY 2022 Q1 FY 2021 INC / (DEC) Growth Growth % Deposits 446,059 410,259 35,800 9% Advances 363,955 345,356 18,599 5% Total Business 810,014 755,615 54,399 7% Demand Deposits 33,370 28,946 4,424 15% Saving
Slide 17: Q1 FY 22 vs Q1 FY 21 Performance – A Snapshot
Q1 FY 22 VS Q1 FY 21 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q1 FY 2022 Q1 FY 2021 INC / (DEC) Growth % Q4 FY 2021 Net Interest Income 4,476 4,369 107 2% 4,285 Other Income 1,956 1,606 350 22% 1,451 Operating Expenses 2,602 2,415 187 8% 2,889 Gross Profit 3,830 3,560 2
Slide 18: FY 21 vs FY 20 Performance – A Snapshot
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 19: FY 21 vs FY 20 Performance – A Snapshot
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 20: Provisions & Contingencies – Breakup
PROVISIONS & CONTINGENCIES – BREAKUP (in INR Mn) PARTICULARS Q1 FY 21 Q1 FY 20 FY 20-21 FY 19-20 Provision for: - Tax 400 450 1,000 1,100 - Bad Debts 2,330 500 5,990 6,310 - Covid 19 -830 1,000 310 1,250 - Standard Assets 130 40 1,045 193 - Depn on Investments - - 178 -317 - Depn on Shifting 23 - -
Slide 21: Q1 FY 22 vs Q1 FY 21 – Income and Expenses Breakup
Q1 FY 22 VS Q1 FY 21 – INCOME AND EXPENSES BREAKUP (in INR Mn) INTEREST INCOME BREAKUP INTEREST EXPENSES BREAKUP Q1 FY Q1 FY Q1 FY Q1 FY PARTICULARS Growth % PARTICULARS Growth % 2022 2021 2022 2021 Interest on Loans 8,560 8,922 -ve Int Exp on Deposits 5,405 5,899 -ve Interest on Investments 1,363 1
Slide 22: 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 23: Strong Deposits and Advances Growth
STRONG DEPOSITS AND ADVANCES GROWTH (in INR Mn) DEPOSITS ADVANCES 10% 11% CAGR 4,45,370 4,46,059 CAGR 3,70,206 3,63,955 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-JUN-2021 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 30-JUN-2021 BUSINE
Slide 24: 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 4,476 (3M) 1,956 (3M) 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 30-JUN-2021 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2021 30-JUN-2021
Slide 25: Key Business Indicators
KEY BUSINESS INDICATORS PARTICULARS Q1 FY 22 Q1 FY 21 FY 20-21 FY 19-20 Q4 FY 21 Cost of Deposits 4.95% 5.89% 5.36% 6.20% 5.05% Yield on Advances 9.40% 10.41% 9.91% 10.76% * 9.19% Yield on Investments 5.61% 6.12% 5.86% 6.69% 5.76% Net Interest Margin 3.86% 3.98% 4.00% 3.98% * 3.72% Cost to Income 40
Slide 26: 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% 1.29% 4.00% 3.86% 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-JUN-21 31-MAR-18 31-MAR-19 31-MAR-20 31-
Slide 27: 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 9.40 8.44 8.37 8.15 8.11 7.62 8 6.82 6.29 6.17 6.20 6 5.36 4.95 4 2 0 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Jun 21 Spread between cost of deposits and yi
Slide 28: Efficiency
EFFICIENCY COST INCOME RATIO (%) CASA RATIO (%) 43.04 29.15 27.57 41.67 41.45 24.22 25.22 24.97 40.46 38.46 31-Mar-2018 31-Mar-2019 31-Mar-2020 31-Mar-2021 30-Jun-2021 31-Mar-2018 31-Mar-2019 31-Mar-2020 31-Mar-2021 30-Jun-2021 BUSINESS PER EMPLOYEE PROFIT PER EMPLOYEE (in INR Mn) (in INR Mn) 139.38
Slide 29: 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 Re-pricing possible at short intervals Term Loan thus reducing interest rate risk 38% Cash Credit & Demand Loan ~90% of our loan book is
Slide 30: Loan Book Sectoral Deployment – Position as on 30.06.2021
LOAN BOOK SECTORAL DEPLOYMENT – POSITION AS ON 30.06.2021 (in INR Mn) Loans collateralized by Deposits 4,986 Large Industries 6,394 Infrastructure 3,165 Retail Traders 1% NBFC 7,485 Personal Loans 2% 2% 2,418 9,535 3% Others 17,048 5% Housing Loan 38% 20,421 5% SECTORAL MSME CRE DEPLOYMENT 138,474 2
Slide 31: Loan Book Sectoral Deployment – Secured & Unsecured Advances
LOAN N BOOK SECTORAL DEPLOYMENT – POSITION AS ON 30.06.2021 (in INR Mn) SECURED & UNSECURED ADVANCES Particulars Amount (INR Mn) (%) Secured Loans 361,626 99% Unsecured Loans 2,329 1% Total 363,955 100% Trading & MSME loans constitute about 52% Diversified credit portfolio reduces credit risk and Lo
Slide 32: 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 30th June 2021 TEXTILE a) Cotton 15,590 (4%) b) Other Textiles 21,922 (6%) METALS a) Iron & Steel 9,410 (3%) b) Other Metals 6,340 (2%) Amount % to Total Industry Name (in INR Mn) Advances APER
Slide 33: Loan Book – Driver to Growth – Q1 FY 22
LOAN BOOK - DRIVER TO GROWTH – Q1 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 100% from Rs.34,488 Mn in Q1 FY 21 to Rs. 69,060 Mn in Q1 FY 22. (in INR Mn) GOLD LOAN PORTFOLIO Jun
Slide 34: Asset Quality
ASSET QUALITY (in INR Mn) GROSS NPA QTM & GROSS NPA % NET NPA QTM & NET NPA % 20,354 12,422 18,932 10,752 14,134 7,785 5.59% 9,771 5,915 8,566 5.11% 3.49% 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-Jun-21 31-Mar-18 31-Mar-19 31-Mar-20 31-Mar-21 30-Jun-
Slide 35: Asset Quality Position – Movement Over the Years
ASSET QUALITY POSITION – MOVEMENT OVER THE YEARS (In INR MN) FY MAR-16 FY MAR-17 MAR FY MAR-18 FY MAR-19 FY MAR-20 FY MAR-21 FY JUN-21 NPA Opening balance 3,358 5,120 6,820 8,565 9,771 14,134 18,932 Additions A 4,290 4,796 5,749 6,322 11,104 11,131 4,822 Recovery made 734 905 1,623 1,980 1,644 1,950
Slide 36: Asset Quality – Gold Loan Portfolio
ASSET QUALITY – GOLD LOAN PORTFOLIO (In INR MN) No. of A/cs Balance Gold Loan –Total 646,514 69,060 Of which, - Standard Accounts 645,795 68,964 - N PA 719 96 Gross NPA 20,354 % of Gold Loan NPA to Gold Loan Portfolio 0.14% % of Gold Loan NPA to Gross NPA 0.47% 35
Slide 37: Restructured Accounts
RESTRUCTURED ACCOUNTS Quaterwise balance outstanding in respect of Restructured Standard borrowers (In INR MN) Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Type of Restructuring No. of No. of No. of No. of No. of Amt Amt Amt Amt Amt Borrowers Borrowers Borrowers Borrowers Borrowers MSME 120 3664 131 4550 191
Slide 38: Security Receipts
SECURITY RECEIPTS 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 No fresh sale to ARC on SR basis from FY 15-16. In the FY 13-14 & 14-15, we had sold some of the NPA accounts to ARC on SR basis
Slide 39: Investments – At a Glance
INVESTMENTS – AT AGLANCE Investments Breakup and Categorywise (in INR Mn) Particulars JUN 2021 JUN 2020 SLR Securities 99,516 94,220 Non-SLR Securities 1,784 3,065 Total Investments 101,300 97,285 Yield on Investments 5.61% 6.12% Investments Breakup: -A FS 7,334 (7%) 18,868 (19%) - HTM 93,966 (93%)
Slide 40: Branch Network
BRANCH NETWORK 39
Slide 41: Strong Presence in the South
STRONG PRESENCE IN THE SOUTH As of Mar 2021 - 702 branches. 630 branches are located in South India out of which 486 in Tamil Nadu. Only 2 branches opened during FY 20-21 No. of % of % of % of State Branches Deposits Advances Business Ta mi lna du 486 81 65 74 Ka rnata ka 41 5 5 5 Andhra pra des h 4
Slide 42: Digital Banking Initiatives
DIGITAL BANKING INITIATIVES 41
Slide 43: 4D: Digitization, Data Analytics, Digital Acquisition & Digital Payments
4D: Digitization, Data Analytics, Digital Acquisition & Digital Payments 1 Digitization and Automation 2 Data Analytics Video KYC Data visualization for Decision making Online Savings, Salary, Student & FD Automated Business Dashboards Account opening for New to Bank leveraging leading reporting too
Slide 44: 4D: Digitization, Data Analytics, Digital Acquisition & Digital Payments
4D: Digitization, Data Analytics, Digital Acquisition & Digital Payments 3 Digital Acquisition 4 Digital Payments Digital and Straight Through Customized payment and Onboarding of clients for collection solutions for Religious, Deposit and Advance products Academic institutions Digital Marketing for
Slide 45: One App for All Your Payment Needs; Innovation in ATMs
One App for all your payment needs Innovation in ATMs - ICCW ~95% of transactions are on Alternate Channels First Bank to launch Interbank Cardless cash 3X growth in UPI transactions and payments withdrawals 1.5X growth in financial transactions on mobile via UPI Wealth Management at your fingertips
Slide 46: 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 47: Open Banking and Fintech Partnerships
Open Banking and Fintech partnerships The Bank is actively collaborating with startups and fintechs to deliver the best-in-class experience for our customers AI based Credit Origination and Underwriting Marketing Automation Digital Document Execution Connected Banking with ERPs Cloud Telephony and A
Slide 48: Shareholding Pattern
SHAREHOLDING PATTERN 47
Slide 49: A Well Diversified Investor Base
A WELL DIVERSIFIED INVESTOR BASE Position as on 30-Jun-2021 Major Institutional Shareholders SHAREHOLDERS HOLDING % QIB, NRI, 6.24 1.01 HDFC Midcap Opportunities Fund 4.47 Life Insurance Corporation of India 3.90 Corp Bodies, Others, Franklin India Prima Fund 3.90 2.99 0.70 SBI Magnum Midcap Fund 3.
Slide 50: Corporate Governance
CORPORATE GOVERNANCE 49
Slide 51: 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 52: 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 53: City Union Bank Ltd – Investor Contact
CITY UNION BANK LTD Regd.Office :149,TSR Big Street,Kumbakonam Street, – 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,GM &