City Union Bank Offering Best Risk Reward In Midcap Banks: Nirmal Bang
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Nirmal Bang Report
We remain positive on City Union Bank Ltd. We like the bank for its impeccable track record.
Despite being a highly conservative lender, the bank’s growth has been higher than the total state credit in Tamil Nadu, implying credit market share gains.
The bank scores full marks on delivering as per guidance. Currently, the bank is guiding for low double-digit growth in FY22E; could be better if macros turn out better than expected.
We are building in a 10% credit growth in FY22E.
Over the last five years (FY17-21E), the bank’s net interest margin has been resilient despite the rates generally falling, implying that it has been able to price risk appropriately.
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