City Union Bank Q4 Review - Stressed Asset Formation Within Guided Range: ICICI Securities
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ICICI Securities Report
City Union Bank Ltd.’s Q4 FY21/FY21 performance was characterised by incremental stressed asset formation at lower end of the guided range as reflected in:
- gross slippages at 3% versus guidance of 3-3.5%, and
- total restructuring at 5% of advances versus guidance of 5-6%.
Emergency Credit Line Guarantee Scheme disbursements stood at ~Rs 21 billion, or 5.6% of advances.
Despite elevated credit cost at 2.3% due to total stressed pool (net non performing loan, restructuring, ECLGS) at ~13.6%, strong core operating profitability (pro provision operating profit at ~3%) and lower tax rate of 14%, return on asset improved to 1.15% in FY21 versus 1% in FY20.
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