News ArticleCity Union Bank Reports 27% Rise in Q2 FY 2027 Profit After Tax to Rs.416 Crore with Improved Asset Quality
Net Interest Income increases 31% to Rs.873 Cr; Gross NPA declines to 1.44% while Deposits Grow 21% to Rs.83,893 Cr in Q2 FY 2027
City Union Bank Limited announced a 27% year-on-year increase in profit after tax to Rs.416 crore for Q2 FY 2027, alongside a 31% rise in net interest income and improved asset quality with reduced gross and net NPAs. Total deposits grew 21% to Rs.83,893 crore with a CASA ratio of 27%.
City Union Bank Limited
General / Other
City Union Bank Limited announced its standalone financial results for the quarter ended September 30, 2026, reporting a 27% increase in profit after tax to Rs.416 crore compared to the same quarter last year, driven by a 31% rise in net interest income and improved asset quality.
During Q2 FY 2027, the bank’s net interest income rose to Rs.873 crore from Rs.667 crore a year earlier, marking a 31% increase, supported by higher interest income and controlled interest expenses.
Non-interest income increased by 35% to Rs.350 crore for the quarter, while operating expenses rose by 24% to Rs.562 crore.
The bank’s total deposits expanded by 21% year-on-year to Rs.83,893 crore with a CASA (Current Account Savings Account) ratio at 27%, and a reduction in cost of deposits to 5.56%.
Advances increased by 26% to Rs.72,442 crore, with a credit-deposit ratio of 86%.
Asset quality improved notably with gross non-performing assets (NPA) declining from 2.42% to 1.44%, and net NPA dropping from 0.90% to 0.48% year-on-year, accompanied by a provision coverage ratio of 82%.
Highlights
- Profit after tax grew 27% year-on-year to Rs.416 crore in Q2 FY 27.
- Net interest income rose 31% to Rs.873 crore compared to Q2 FY 26.
- Total deposits increased 21% to Rs.83,893 crore with CASA ratio at 27%.
- Gross NPA decreased to 1.44% from 2.42% in preceding year quarter.
- Cost of deposits reduced to 5.56% from 5.71%.
- Capital adequacy ratio remained strong at 21.26% as per RBI norms.
Key Data Snapshot
Financial performance
- City Union Bank’s Q2 FY 27 profit after tax increased to Rs.416 crore, up 27% from Rs.329 crore in Q2 FY 26.
- Net interest income rose 31% to Rs.873 crore, driven by a 27% increase in interest income to Rs.2,092 crore.
- Non-interest income also grew 35% to Rs.350 crore, supporting total income of Rs.2,442 crore, up 28% year-on-year.
- Operating expenses were Rs.562 crore, 24% higher than the previous year quarter, resulting in an operating profit of Rs.661 crore, 40% higher year-on-year.
Key details
- Total deposits reached Rs.83,893 crore in Q2 FY 27, a 21% increase compared to Rs.69,486 crore in Q2 FY 26.
- CASA deposits constitute 27% of total deposits, supporting a lower cost of deposits at 5.56%.
- Advances increased by 26% to Rs.72,442 crore with an average credit-deposit ratio of 86%.
- Gross NPA declined to 1.44% from 2.42%, and net NPA dropped to 0.48% from 0.90%, reflecting improved asset quality.
- Provision coverage ratio stands at 82% including technical write-offs, indicating sufficient credit loss cover.
Key details
- Capital adequacy ratio as per RBI Basel III norms is 21.26%, with Tier 1 capital at 20.43%, exceeding regulatory requirements.
- Net interest margin improved to 3.87% from 3.63% a year ago, aided by reduced cost of deposits.
- Return on assets is steady at 1.62%, above the bank’s long-term target of 1.50%.
- Cost to income ratio improved to 45.96% from 49.16%, indicating better cost efficiency.
Background and context
- City Union Bank is a scheduled commercial bank with 1002 branches across 19 states and 4 union territories in India.
- The bank focuses on SMEs, agriculture, and traders besides general banking services.
- Technology-enabled banking services include ATMs, internet banking, mobile banking, e-wallets, and social media banking.
Next milestones
- City Union Bank plans an earnings conference call on October 28, 2026 at 6:30 p.m. IST to discuss Q2 FY 27 results.
- The transcript of the call will be available on the bank’s website under Investor Relations.
Highlights
- Profit after tax grew 27% year-on-year to Rs.416 crore in Q2 FY 27.
- Net interest income rose 31% to Rs.873 crore compared to Q2 FY 26.
- Total deposits increased 21% to Rs.83,893 crore with CASA ratio at 27%.
- Gross NPA decreased to 1.44% from 2.42% in preceding year quarter.
- Cost of deposits reduced to 5.56% from 5.71%.
- Capital adequacy ratio remained strong at 21.26% as per RBI norms.
Disclosures
- SEBI Listing Regulations 2015 Schedule III Part A para A
- Reserve Bank of India Basel III norms
Source Information
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