Shares of City Union Bank Limited started their trading session today at Rs 144 and currently trade at Rs 140.50. The scrip is up nearly 5.5 percent as compared to the previous closing price of Rs 133.20. In the last one-month period, the stock has gained and provided returns of around 13 percent to its stakeholders.
One of the probable reasons for the stock prices to surge is pertaining to the recent regulatory filing posted with the exchange. The filing mentioned that the Board of the Bank has given its approval for the re-appointment of Mr. N.Kamakodi as the Managing Director (MD) and CEO of the Bank. The re-appointment is for a tenure of 3 years and with effect from 1st May 2023.
City Union Bank Limited, based in India, is engaged in the business of providing banking products and services to corporations as well as individuals in the country. It operates through four segments which include Treasury, Corporate Banking, Retail Banking, and other Banking Operations. The company generates its revenue entirely from domestic operations.
Having a quick glance at the financials of the Bank, the total income generated and the net profit numbers reported have moved in opposing directions. Total revenue increased from Rs 1,355 crores in Q2 to Rs 1,430 crores in Q3. On a contrasting note, the net profits went down from Rs 276 crores to Rs 218 crores during the same period.
Evaluating some of the basic Bank-specific metrics, the net NPA ratio has reduced from 4.09 percent in FY20-21 to 2.95 percent in FY21-22. In addition, the CASA ratio has also showcased optimistic growth scenarios shifting from 29.15 percent during FY20-21 to 32.56 percent in FY21-22.
Coming onto the profitability ratios, the return on equity (ROE), as well as return on capital employed (ROCE), improved in recent financial years with ROE taking a shift from 10.64 percent in FY20-21 to 12.23 percent in FY21-22 and ROCE numbers, during the same timeframe, shifted from 10.51 percent to 11.04 percent.
Net profit margins of the Bank have consistently increased over the past 3 financial years, from 14.34 percent in FY20-21 to 18.52 percent in FY21-22.
Written by Amit Madnani
