City Union Bank Limited · NSE:CUB
City Union Bank — Investor Presentation (March 2020)
47 slides from City Union Bank's investor presentation, March 2020
Slide 1: City Union Bank - March 2020
City UNION BANK
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 15 Overview Performance Highlights – Financial Performance & March 2020 Business Profile 35 40 42 44 Branch Network Branch Network Shareholding Pattern Corporate Governance 3
Slide 4: Overview
OVERVIEW 4
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’ & TCS agreement withTCS for equity shares shareholders & employees rewarded Scheduled bank since ‘The Union Bank Limited’ for core ban
Slide 7: 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 700 branches Continuous profitability and dividend payout in all Strong presence in South India (628 branches) 115+ years of operations of which 485 are in Tamil Nadu alone Business growth of 20%+ CAGR in last 10 years 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 2020
PERFORMANCE HIGHLIGHTS – MARCH 2020 10
Slide 11: Q4 / FY 2020 Performance - A Snapshot
Q4 / FY 2020 PERFORMANCE – A SNAPSHOT Deposits increased by 6% from Rs.384 Bn to Rs.408 Bn Y-o-Y Advances registered a growth of 5% from Rs.331 Bn to Rs.346 BnY-o--Y Total business grown by 5% from Rs.715 Bn to Rs.754 Bn Y-o-Y Gross Profit increased by 8% to Rs.13,414 Mn from Rs.12,400 Mn (Y-o-Y) (Y
Slide 12: Q4 FY 2020 vs Q4 FY 2019 Performance - A Snapshot
Q4 FY 2020 VS Q4 FY 2019 PERFORMANCE – A SNAPSHOT (in INR Mn) 408,325 345,762 754,087 101,970 6% 5% 5% 5% 384,480 330,652 715,132 96,982 Deposits Advances Total Business CASA 3,351 (-)953 4,195 44.04% -ve -ve -ve % 3,378 1,751 4,206 40.48% Gross Profit Net Profit Net Interest Cost to Income Income -
Slide 13: FY 2020 vs FY 2019 Performance - A Snapshot
FY 2020 VS FY 2019 PERFORMANCE – A SNAPSHOT (in INR Mn) 408,325 345,762 754,087 101,970 6% 5% 5% 5% 384,480 330,652 715,132 96,982 Deposits Advances Total Business CASA 13,414 4,763 16,752 43.04% 8% -ve 4% % 12,400 6,829 16,115 41.67% Gross Profit Net Profit Net Interest Cost to Income Income 1.00%
Slide 14: Financial Performance & Business Profile
FINANCIAL PERFORMANCE & BUSINESS PROFILE 14
Slide 15: FY 20 vs FY 19 Performance - A Snapshot
FY 20 VS FY 19 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS FY 2020 FY 2019 INC / (DEC) Growth Growth % 9M FY 2020 Deposits 408,325 384,480 23,845 6% 398,120 Advances 345,762 330,652 15,110 5% 338,276 Total Business 754,087 715,132 38,955 5% 736,396 Demand Deposits 29,244 3
Slide 16: Q4 FY 20 vs Q4 FY 19 Performance - A Snapshot
Q4 FY 20 VS Q4 FY 19 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q4 FY 2020 Q4 FY 2019 INC / (DEC) Growth % Q3 FY 2020 Net Interest Income 4,195 4,206 -ve -ve 4,273 Other Income 1,793 1,469 324 22% 1,423 Operating Expenses 2,637 2,297 340 15% 2,612 Gross Profit 3,351 3,378
Slide 17: FY 20 vs FY 19 Performance - A Snapshot
FY 20 VS FY 19 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS FY 2020 FY 2019 INC / (DEC) Growth % Net Interest Income 16,752 16,115 637 4% Other Income 6,799 5,144 1,655 32% Operating Expenses 10,137 8,859 1,278 14% Gross Profit 13,414 12,400 1,014 8% Provisions & Contingenc
Slide 18: Provisions & Contingencies - Breakup
PROVISIONS & CONTINGENCIES – BREAKUP (in INR Mn) PARTICULARS Q4 FY 20 Q4 FY 19 FY 19-20 FY 18-19 Q3 FY 20 Provision for: - Tax -200 720 1,100 2,420 350 - Bad Debts 3105 810 6,310 2,700 785 - Covid 19 1250 - 1250 - - - Standard Assets 80 153 193 215 60 - Depn on Investments 3 - -317 160 -80 - Depn on
Slide 19: Q4 FY 20 vs Q4 FY 19 - Income and Expenses Breakup
Q4 FY 20 VS Q4 FY 19 – 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 % 2020 2019 2020 2019 Interest on Loans 8,806 8,384 5% Int Exp on Deposits 6,058 5,564 9% Interest on Investments 1,455 1,3
Slide 20: FY 20 vs FY 19 - Income and Expenses Breakup
FY 20 VS FY 19 – INCOME AND EXPENSES BREAKUP (in INR Mn) INTEREST INCOME BREAKUP INTEREST EXPENSES BREAKUP FY FY FY FY PARTICULARS Growth % PARTICULARS Growth % 2020 2019 2020 2019 Interest on Loans 34,946 31,777 10% Int Exp on Deposits 24,369 21,080 16% Interest on Investments 6,099 5,536 10% Other
Slide 21: Strong Deposits and Advances Growth
STRONG DEPOSITS AND ADVANCES GROWTH (in INR Mn) DEPOSITS ADVANCES 11% 14% CAGR CAGR 408,325 330,652 345,762 384,480 328,526 282,386 301,157 241,125 271,581 212,531 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-MAR-2019 31-MAR-2020 BUSINESS CASA 12
Slide 22: Income Growth Over the Years
INCOME GROWTH OVER THE YEARS… (in INR Mn) NET INTEREST INCOME GROWTH OTHER INCOME GROWTH 16% 11% CAGR CAGR 16,115 16,752 6,799 14,303 11,988 5,321 5,144 4,840 9,810 4,100 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-MAR-2019 31-MAR-2020 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-MAR-2019 31-MAR-2020 CEB GROWT
Slide 23: Key Business Indicators
KEY BUSINESS INDICATORS PARTICULARS Q4 FY 20 Q4 FY 19 FY 19-20 FY 18-19 Q3 FY 20 Cost of Deposits 6.07% 6.27% 6.20% 6.17% 6.17% Yield on Advances 10.46% 11.07% 10.76% 10.95% 10.73% Yield on Investments 6.54% 6.96% 6.69% 6.95% 6.62% Net Interest Margin 3.91% 4.40% 3.98% 4.32% 3.96% Cost to Income 44.
Slide 24: 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% 1.50% 1.50% 4.42% 4.50% 4.32% 1.50% 4.17% 3.98% 1.40% 4.00% 3.81% 1.30% 1.20% 3.50% 1.10% 1.00% 1.00% 3.00% 0.90% 31-MAR-16 31-MAR-17 31-MAR-18 31-MAR-19 31-MAR-20 31-MAR-16 31-MAR-17 31-MAR-18 31-
Slide 25: Cost of Deposits & Yield on Advances
COST OF DEPOSITS & YIELD ON ADVANCES (in %) 16 14 13.56 13.49 13.43 13.04 13.18 12.83 12.47 12.10 12 11.46 10.95 10.76 10 8.44 8.37 8.15 8.11 7.73 7.62 8 6.94 6.82 6.29 6.17 6.20 6 4 2 0 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Spread between cost of deposits and
Slide 26: Efficiency
EFFICIENCY COST INCOME RATIO (%) CASA RATIO (%) 43.04 25.22 24.22 24.97 23.37 41.67 20.37 40.94 40.10 38.46 31-Mar-2016 31-Mar-2017 31-Mar-2018 31-Mar-2019 31-Mar-2020 31-Mar-2016 31-Mar-2017 31-Mar-2018 31-Mar-2019 31-Mar-2020 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 48% of advances Bills Purchased & Bills Discounted Term Loan Re-pricing possible at short intervals thus reducing interest rate risk 36% Cash Credit & Demand Loan ~95% of our loan book is
Slide 28: Loan Book Sectoral Deployment - Position as on 31.03.2020
LOAN BOOK SECTORAL DEPLOYMENT – POSITION AS ON 31.03.2020 (in INR Mn) Loans collateralized by Deposits Infrastructure 5,858 JL NonAgri 3,730 7,131 NBFC 2% 1% 2,886 Retail Traders 9,431 2% Other Personal Loans 3% 10,177 3% Large Industries 21,387 6% Housing Loans 6% 22,833 31% M S M E 107,531 SECTORA
Slide 29: Loan Book Sectoral Deployment - Secured & Unsecured Advances
LOAN N BOOK SECTORAL DEPLOYMENT – POSITION AS ON 31.03.2020 (in INR Mn) SECURED & UNSECURED ADVANCES Particulars Amount (INR Mn) (%) Secured Loans 343,152 99% Unsecured Loans 2,610 1% Total 345,762 100% Trading & MSME loans earning higher yield constitute about 48% Diversified credit portfolio reduc
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 2020 TEXTILE a) Cotton 16,430 (5%) b) Other Textiles 20,763 (6%) METALS a) Iron & Steel 11,098 (3%) Amount % to Total b) Other Metals 5,503 (1%) Industry Name (in INR Mn) Advances APE
Slide 31: Asset Quality
ASSET QUALITY (in INR Mn) GROSS NPA QTM & GROSS NPA % NET NPA QTM & NET NPA % 14,134 7,785 9,771 5,915 8,566 4,748 6,820 4.09% 4,083 5,120 3,232 3.03% 2.95% 2.41% 2.83% 2.29% 1.71% 1.70% 1.81% 1.53% 31/Mar/16 31/Mar/17 31/Mar/18 31/Mar/19 31/Mar/20 31/Mar/16 31/Mar/17 31/Mar/18 31/Mar/19 31/Mar/20 3
Slide 32: Asset Quality Position - Movement Over the Years
ASSET QUALITY POSITION – MOVEMENT OVER THE YEARS (RS IN MN) FY MAR-16 FY MAR-17 FY MAR-18 FY MAR-19 Q4 FY 2020 FY MAR-20 NPA Opening balance 3,358 5,120 6,820 8,565 11,854 9,771 Additions A 4,290 4,796 5,749 6,322 4,807 11,104 Recovery / SR * 734 905 1,623 1,980 318 1,644 Upgradations 546 556 433 49
Slide 33: Restructured Accounts
RESTRUCTURED ACCOUNTS Balance outstanding as on 31.03.2020 in respect of Restructured Standard borrowers Type of Restructuring No. of Borrowers Amount (in INR Mn) SME 104 2813 NSME 47 158 Total 151 2971 The above disclosure is in respect of Restructured Standard Accounts excluding NPA Restructured S
Slide 34: Investments - At a Glance
INVESTMENTS – AT AGLANCE Investments Breakup and Categorywise (in INR Mn) Particulars MAR 2020 MAR 2019 SLR Securities 89,395 74,764 Non-SLR Securities 2,967 3,869 Total Investments 92,362 78,633 Yield on Investments 6.69% 6.95% Investments Breakup: -A FS 15,518 (17%) 15,396 (20%) - HTM 76,844 (83%)
Slide 35: COVID 19 Outbreak
COVID 19 OUTBREAK 35
Slide 36: COVID-19: An Overview from Banking Perspective
COVID-19 19 : An overview from Banking Perspective The Novel Corona Virus COVID-19 that was first discovered in Wuhan, China, represents a significant risk to public health globally, and a jolt to the world economy. The disruption in China has created a simultaneous shock to supply chains and demand
Slide 37: COVID-19: Precautionary Measures Taken by the Bank
COVID-19 19 : Precautionary measures taken by the Bank Health & Safety of employees: Robust and proactive safety measures to safeguard employees, customers and community. Sanitization, masks and protective gears provided at all branches & ATMs About 65% of total employees were allowed to work from h
Slide 38: COVID-19: Status of Loan Accounts and Moratorium
19 : Status of Loan Accounts as of 29th Feb 2020 COVID-19 Moratorium: The Bank has extended the option to all the borrowers to avail moratorium as per the RBI instructions. Despite moratorium given to all, borrowers who have paid for two or more months comprised 48% of the exposure. Present outstand
Slide 39: COVID-19: Resilience during the Turbulence
COVID-19 19 : Resilience during the turbulence Liquidity Stability Business growth Capital adequacy Maintaining LCR above Strong Retail Franchise Deposits grown by Rs. CRAR stood at 16.76% 200% (260% as of 1,030 cr during Q4 FY 20 31.05.2020). Tier I capital is 15.80% No Certificate of Deposit We ha
Slide 40: Branch Network
BRANCH NETWORK 40
Slide 41: Strong Presence in the South
STRONG PRESENCE IN THE SOUTH As of Mar 2020 - 700 branches. 628 branches are located in South India out of which 485 in Tamil Nadu No. of % of % of % of State Branches Deposits Advances Business Ta mi l nadu 485 80 62 72 Ka rnata ka 41 6 6 6 Andhrapra des h 45 2 8 5 1 3 Tel engana 33 3 6 4 2 Ma hara
Slide 42: Shareholding Pattern
SHAREHOLDING PATTERN 42
Slide 43: A Well Diversified Investor Base
A WELL DIVERSIFIED INVESTOR BASE Position as on 31-Mar-2020 Major Institutional Shareholders SHAREHOLDERS HOLDING % QIB, NRI, 3.37 1.00 HDFC Midcap Opportunities Fund 4.48 Life Insurance Corporation of India 4.13 Corp Bodies, Others, Axis Mutual Fund 4.07 4.57 0.73 Smallcap World Fund INC (Capital G
Slide 44: Corporate Governance
CORPORATE GOVERNANCE 44
Slide 45: 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 a bachelor of Science, Master of Business Administration Dr. N. Kamakodi is serving as MD & CEO of the Bank from May 2011. He and
Slide 46: 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 47: City Union Bank Ltd. Contact Details
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