City Union Bank Q3 Review - Subpar Asset Quality Trends: Dolat Capital
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Dolat Capital Report
City Union Bank Ltd. reported an in-line operating performance with net interest income growth at 14% YoY.
Net interest margin increased QoQ by 4 basis points to 4.16% despite the impact of interest reversals on pro forma non-performing assets as benefit on cost of funds more than offset lower yields.
High treasury gains aided operating profits and profit after tax. However, unlike most peers, asset quality metrics failed to surprise on the positive.
Pro forma NPAs increased to approximately 6% as of December 2020 against 4.1% for March 2020, with pro forma net NPA at 3.37%.
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