City Union Bank Q4 Review - Asset Quality Improves; RoA Normalisation Some Time Away: Dolat Capital
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Dolat Capital Report
City Union Bank Ltd. reported weaker than anticipated operating metrics and profit after tax led by high interest reversals and elevated provisions.
Profit after tax would have been further lower if not for the tax reversals during the quarter.
However, asset quality surprised positively, with marginal slippages for Q4 FY21 post intra quarter recoveries resulting in 100 basis points QoQ decline in pro forma gross non performing asset to 5.1% and ~40 basis points sequential decline in pro forma net non performing asset to 2.97%.
Sequential reduction in non-performing asset ratios was partly also supported by high write-offs.
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