Buy City Union Bank Ltd For Target Rs.215- icici direct
![](https://portfolio.investmentguruindia.com/investmentguruimages/upload/post/2022/08/41b6ab126b1a131228ad77f6aff293d3.jpg)
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
https://t.me/InvestmentGuruIndiacom
Download Telegram App before Joining the Channel
Healthy quarter; growth guidance revised upwards…
About the stock: City Union Bank is an old private sector bank with focus on MSME and agri loans that form 61% of overall advances.
* Strong presence in south India with 644 out of total 727 branches
* Total 99% of bank’s advances are secured in nature
Q1FY23 Results: Healthy performance led by strong business growth.
* Advances grew 12.5% YoY to | 40934 crore. Deposits up 9.3% YoY with CASA growth at 25% YoY
* NII up 17.3% YoY, 4.8% QoQ. NIMs declined marginally 6 bps QoQ at 3.95%
* GNPA down 5 bps QoQ to 4.65%. Restructured book declined to ~5%
What should investors do? City Union Bank’s share price has increased by ~25% in the past five year. Healthy capitalisation, secured loans and improving asset quality trend are key positives
Key triggers for future price performance:
* The management revised their credit growth guidance upwards to 15-18%, which is encouraging. Business momentum to see uptick from here on
* Opex to remain elevated, though steady margin at ~4% and business growth to aid operational performance and return ratios
*Asset quality hiccups fading away as incremental stress formation under control
Alternate Stock Idea: Apart from City Union Bank, in our coverage we also like CSB Bank.
* CSB Bank is a south based private sector bank with Kerala contributing ~48% of total business. Changed strategy in various aspects of lending has led to transformation and improved performance in the past few years
* BUY with a target price of | 250
To Read Complete Report & Disclaimer Click Here
For More ICICI Securities Disclaimer https://www.icicisecurities.com/AboutUs.aspx?About=7
Above views are of the author and not of the website kindly read disclaimer
![](https://portfolio.investmentguruindia.com/uploads/news/Axis Securities Ltd.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Indiateam57.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/munishakhatwal57.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/geojit Financial Services.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/tatapower57.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/MP Ahammed.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Fintech Pre-budget expectation.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/uttarpradesh57.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Budget_3.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Cyberpeace.jpg)