City Union Bank Limited · NSE:CUB
City Union Bank — Investor Presentation (June 2019)
44 slides from City Union Bank's investor presentation, June 2019
Slide 1: June 2019
JUNE 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 & June 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: 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 115+ 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 – June 2019
PERFORMANCE HIGHLIGHTS – JUNE 2019
Slide 11: Q1 FY 2020 Performance – A Snapshot
Q1 FY 2020 PERFORMANCE – A SNAPSHOT Deposits increased by 16% from Rs.336 Bn to Rs.391 Bn Y-o-Y Advances registered a growth of 14% from Rs.282 Bn to Rs.322 BnY-o o-Y Total business grown by 15% to Rs.713 Bn from Rs.618 Bn Y-o-Y Gross Profit increased by 17% from Rs.2,994 Mn to Rs.3,514 Mn Net Profi
Slide 12: Q1 FY 2020 vs Q1 FY 2019 Performance – A Snapshot
Q1 FY 2020 VS Q1 FY 2019 PERFORMANCE – A SNAPSHOT (All figures in INR Mn) 390,768 322,295 713,063 91,613 16% 14% 15% 14% 335,974 282,151 618,125 80,384 Deposits Advances Total Business CASA 3,514 1,856 4,169 39.43% 17% 15% 11% % 2,994 1,616 3,748 40.58% Gross Profit Net Profit Net Interest Cost to I
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: Q1 FY 20 vs Q1 FY 19 Performance - A Snapshot
Q1 FY 20 VS Q1 FY 19 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q1 FY 2020 Q1 FY 2019 INC / (DEC) Growth Growth % Deposits 390,768 335,974 54,794 16% Advances 322,295 282,151 40,144 14% Total Business 713,063 618,125 94,938 15% Demand Deposits 28,532 27,579 953 3% Saving
Slide 16: Q1 FY 20 vs Q1 FY 19 Performance - A Snapshot
Q1 FY 20 VS Q1 FY 19 PERFORMANCE - A SNAPSHOT (in INR Mn) FINANCIAL PERFORMANCE PARTICULARS Q1 FY 2020 Q1 FY 2019 INC / (DEC) Growth % Q4 FY 2019 Net Interest Income 4,169 3,748 421 11% 4,206 Other Income 1,633 1,291 342 26% 1,469 Operating Expenses 2,288 2,045 243 12% 2,297 Gross Profit 3,514 2,994
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 Growth % Deposits 384,480 328,526 55,954 17% Advances 330,652 282,386 48,266 17% Total Business 715,132 610,912 104,220 17% Demand Deposits 32,145 27,863 4,282 15% Saving Deposits
Slide 18: 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 19: Provisions & Contingencies – Breakup
PROVISIONS & CONTINGENCIES – BREAKUP (in INR Mn) PARTICULARS Q1 FY 20 Q1 FY 19 Q4 FY 19 FY 18-19 FY 17-18 Provision for: - Tax 500 600 720 2,420 1,980 - Bad Debts 1,440 650 810 2,700 3,030 - Standard Assets -37 5 153 215 15 - Depn on Investments -240 80 - 160 855 - Depn on Shifting - 65 - 65 102 - R
Slide 20: Q1 FY 20 vs Q1 FY 19 – Income and Expenses Breakup
Q1 FY 20 VS Q1 FY 19 – 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 % 2020 2019 2020 2019 Interest on Loans 8,686 7,425 17% Int Exp on Deposits 5,945 5,011 19% Interest on Investments 1,411 1
Slide 21: 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 22: Strong Deposits and Advances Growth
STRONG DEPOSITS AND ADVANCES GROWTH (in INR Mn) DEPOSITS ADVANCES 12% 16% CAGR CAGR 3,30,652 3,22,295 2,82,386 3,84,480 3,90,768 2,41,125 2,12,531 3,01,157 3,28,526 2,71,581 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-MAR-2019 30-JUN-2019 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-MAR-2019 30-JUN-2019 BUSINE
Slide 23: Income Growth Over the Years
INCOME GROWTH OVER THE YEARS… (in INR Mn) NET INTEREST INCOME GROWTH OTHER INCOME GROWTH 19% 6% CAGR 16,115 CAGR 14,303 5,321 5,144 11,988 4,840 4,100 9,810 4,169 (3M) 1,633 (3M) 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-MAR-2019 30-JUN-2019 31-MAR-2016 31-MAR-2017 31-MAR-2018 31-MAR-2019 30-JUN-2019 C
Slide 24: Key Business Indicators
KEY BUSINESS INDICATORS PARTICULARS Q1 FY 20 Q1 FY 19 Q4 FY 19 FY 18-19 FY 17-18 Cost of Deposits 6.27% 6.15% 6.27% 6.17% 6.29% Yield on Advances 10.97% 10.86% 11.07% 10.95% 11.46% Yield on Investments 6.93% 6.91% 6.96% 6.95% 6.95% Net Interest Margin 4.11% 4.24% 4.40% 4.32% 4.42% Cost to Income 39.
Slide 25: Key Business Ratios – Yearly Trends
KEY BUSINESS RATIOS – YEARLY TRENDS NET INTEREST MARGIN RETURN ON ASSETS 5.00% 1.70% 1.64% 1.63% 4.42% 1.65% 4.50% 4.32% 1.60% 4.17% 4.11% 1.60% 4.00% 3.81% 1.55% 1.50% 1.50% 1.50% 3.50% 1.45% 3.00% 1.40% 31-MAR-16 31-MAR-17 31-MAR-18 31-MAR-19 30-JUN-19 31-MAR-16 31-MAR-17 31-MAR-18 31-MAR-19 30-JU
Slide 26: 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 10.97 10 8.44 8.37 8.15 8.11 7.73 7.62 8 6.94 6.82 6.29 6.17 6.27 6 4 2 0 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Jun 19 Spread between cost of deposits and
Slide 27: Efficiency
EFFICIENCY COST INCOME RATIO (%) CASA RATIO (%) 41.67 40.94 24.22 25.22 23.37 23.44 40.10 20.37 39.43 38.46 31-Mar-2016 31-Mar-2017 31-Mar-2018 31-Mar-2019 30-Jun-2019 31-Mar-2016 31-Mar-2017 31-Mar-2018 31-Mar-2019 30-Jun-2019 BUSINESS PER EMPLOYEE PROFIT PER EMPLOYEE (in INR Mn) (in INR Mn) 129.60
Slide 28: 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 29: Loan Book Sectoral Deployment – Position as on 30.06.2019
LOAN BOOK SECTORAL DEPLOYMENT – POSITION AS ON 30.06.2019 (in INR Mn) Infrastructure 3,537 Loans collateralized by Deposits JL NonAgriculture 5,240 3,721 Retail Traders 10,391 2% 1% NBFC Other Personal Loans 3% 3,141 11,435 4% Commercial Real Estate 6% 20,064 Housing Loans 6% 21,148 33% M S M E 106,
Slide 30: Loan Book Sectoral Deployment – Secured & Unsecured Advances
LOAN N BOOK SECTORAL DEPLOYMENT – POSITION AS ON 30.06.2019 (in INR Mn) SECURED & UNSECURED ADVANCES Particulars Amount (INR Mn) (%) Secured Loans 319,882 99% Unsecured Loans 2,413 1% Total 322,295 100% Trading & MSME loans earning higher yield constitute about 50% Diversified credit portfolio reduc
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 30th June 2019 TEXTILE a) Cotton 15,316 (5%) b) Other Textiles 19,379 (6%) METALS a) Iron & Steel 10,930 (3%) Amount % to Total b) Other Metals 4,540 (1%) Industry Name (in INR Mn) Advances PA
Slide 32: Asset Quality
ASSET QUALITY (in INR Mn) GROSS NPA QTM & GROSS NPA % NET NPA QTM & NET NPA % 10,762 9,771 5,915 6,000 8,566 4,748 6,820 4,083 5,120 3,232 3.34% 3.03% 2.95% 2.41% 2.83% 1.71% 1.81% 1.89% 1.53% 1.70% 31-Mar-16 31-Mar-17 31-Mar-18 31-Mar-19 30-Jun-19 31-Mar-16 31-Mar-17 31-Mar-18 31-Mar-19 30-Jun-19 S
Slide 33: 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 FY MAR-19 Q1 FY 2020 NPA Opening balance 2,931 3,358 5,120 6,820 8,565 9,771 Additions A 4,250 4,290 4,796 5,749 6,322 1,999 Recovery / SR * 2,118 734 905 1,623 1,980 368 Upgradations 227 546 556 433
Slide 34: Restructured Accounts
RESTRUCTURED ACCOUNTS Balance outstanding as on 30.06.2019 in respect of Restructured Standard borrowers Type of Restructuring No. of Borrowers Amount (in INR Mn) SME 48 482 NSME 50 156 Total 98 638 The above disclosure is in respect of Restructured Standard Accounts excluding NPA Restructured Stand
Slide 35: Investments – At a Glance
INVESTMENTS – AT AGLANCE Investments Breakup and Categorywise (in INR Mn) Particulars JUN 2019 JUN 2018 SLR Securities 82,611 78,431 Non-SLR Securities 3,652 3,667 Total Investments 86,263 82,098 Yield on Investments 6.93% 6.91% Investments Breakup: -A FS 20,988 (24%) 20,894 (25%) - HTM 65,275 (76%)
Slide 36: Cross Selling - Tie-up / Arrangements
Cross Selling - Tie-up / Arrangements We are in the process of making necessary tie - ups / agreements with Insurance and Mutual Funds distribution with companies like Star Health, Integrated Enterprises, BSE Star MF etc. We don’t expect any spectacular increase in third party distribution immediate
Slide 37: Branch Network
BRANCH NETWORK
Slide 38: Strong Presence in the South
STRONG PRESENCE IN THE SOUTH As of Jun 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 na du 455 79 63 72 Ka rna ta ka 40 6 5 6 Andhra pra des h 39 2 9 5 1 Tel enga na 31 3 6 4 3 2 Ma
Slide 39: Shareholding Pattern
SHAREHOLDING PATTERN
Slide 40: A Well Diversified Investor Base
A WELL DIVERSIFIED INVESTOR BASE Position as on 30-Jun-2019 Major Institutional Shareholders SHAREHOLDERS HOLDING % NRI, 0.98 HDFC Midcap Opportunities Fund 4.44 Others, Life Insurance Corporation of India 3.66 0.84 Axis Emerging Opportunities Fund 2.82 Corp Bodies, FII, GKFF Ventures (Argonaut Vent
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. 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 43: 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 44: 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