CUBNSEQ4 & FY 2026May 04, 2026

City Union Bank Limited

8,460words
53turns
6analyst exchanges
6executives
Management on call
N. Kamakodi
MANAGING DIRECTOR AND
R. Vijay Anandh
EXECUTIVE DIRECTOR – CITY UNION BANK LIMITED
V. Ramesh
EXECUTIVE DIRECTOR – CITY UNION BANK LIMITED
J. Sadagopan
CHIEF FINANCIAL OFFICER – CITY UNION BANK LIMITED
K. Jayaraman
CHIEF COMPLIANCE OFFICER,
Jignesh Shial
AMBIT CAPITAL
Key numbers — 40 extracted
INR41 crore
ieved many milestones. If you look into the paid-up capital between 2011 and 2026, increased from INR41 crores to INR74 crores, about just under two times growth, which we have achieved without diluting the
INR74 crore
nes. If you look into the paid-up capital between 2011 and 2026, increased from INR41 crores to INR74 crores, about just under two times growth, which we have achieved without diluting the capital, like sa
INR1,815 crore
he total number of staff members increasing by three times, market capitalization increasing from INR1,815 crores to INR19,450 crores, which is about 11 times or CAGR of 17% in this 15 years. And the net wort
INR19,450 crore
staff members increasing by three times, market capitalization increasing from INR1,815 crores to INR19,450 crores, which is about 11 times or CAGR of 17% in this 15 years. And the net worth of the bank increase
17%
alization increasing from INR1,815 crores to INR19,450 crores, which is about 11 times or CAGR of 17% in this 15 years. And the net worth of the bank increased from INR1,007 crores to INR10,459 crore
INR1,007 crore
h is about 11 times or CAGR of 17% in this 15 years. And the net worth of the bank increased from INR1,007 crores to INR10,459 crores, which is almost 10 times increase with a CAGR of 17% during this period.
INR10,459 crore
or CAGR of 17% in this 15 years. And the net worth of the bank increased from INR1,007 crores to INR10,459 crores, which is almost 10 times increase with a CAGR of 17% during this period. I take this opportun
rs,
f 17% during this period. I take this opportunity to offer my sincere thanks to various stakeholders, be it shareholders, customers, employees, regulators, and everyone who supported the bank and st
1.5 %
along with NIM levels holding up. We also said the ROA is expected to be around the same level of 1.5 % what we were having during the first three quarters. And our cost-to-income ratio will be in th
50 %
during the first three quarters. And our cost-to-income ratio will be in the range of about 48 to 50 % and all. We also shared that our slippage for the whole year will be about INR700 to INR750 cro
INR700
ge of about 48 to 50 % and all. We also shared that our slippage for the whole year will be about INR700 to INR750 crores, compared to about INR800 crores plus during the financial year 2025. By and
INR750 crore
48 to 50 % and all. We also shared that our slippage for the whole year will be about INR700 to INR750 crores, compared to about INR800 crores plus during the financial year 2025. By and large, almost all
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Guidance — 20 items
N. Kamakodi
opening
“And we have seen the deposit during the 15 years increasing by six times, advances increasing by seven times, total business increasing by about seven times, net profit increasing by about six times, the number of branches increasing by four times, the total number of staff members increasing by three times, market capitalization increasing from INR1,815 crores to INR19,450 crores, which is about 11 times or CAGR of 17% in this 15 years.”
N. Kamakodi
opening
“And the net worth of the bank increased from INR1,007 crores to INR10,459 crores, which is almost 10 times increase with a CAGR of 17% during this period.”
N. Kamakodi
opening
“Being the last quarter, since I am not going to get this opportunity again, I will go through the numbers and I will hand over the mic to my successor for sharing the outlook of financial year 2027 and beyond, and I will be discussing with you the progress which happened during the last year.”
N. Kamakodi
opening
“They will be strengthening the board to take it to the greater heights.”
N. Kamakodi
opening
“Like we said, we will end up with high teen growth for the financial year 2026, which will be over and above the industry level growth.”
N. Kamakodi
opening
“And we said our growth of deposits will be aligned with the credit growth, with a focus on CASA and granular term deposits.”
N. Kamakodi
opening
“And our cost-to-income ratio will be in the range of about 48 to 50 % and all.”
N. Kamakodi
opening
“We also shared that our slippage for the whole year will be about INR700 to INR750 crores, compared to about INR800 crores plus during the financial year 2025.”
N. Kamakodi
opening
“And probably we will be having many more milestones in the years to come under the leadership of my successor.”
N. Kamakodi
opening
“As given earlier, our focus will be on core MSME, gold loan, and secured retail.”
Risks & concerns — 9 flagged
Subramaniam as Additional Director of the board in the capacity of the Independent Director, who is a chartered accountant and seasoned IT executive with expertise in various fields like information technology, including artificial intelligence, risk management and all.
— N. Kamakodi
But the challenge had been to ensure that we don't get into any pitfalls and we had to greater extent navigated through multiple cycles, be it the 2008 global financial crisis I was the Executive Director, I was part of the system.
— N. Kamakodi
But I just wanted to understand the risk practices here in the sense that, let's say, in January, February, from the peak of gold loan prices, gold prices have come down by 10% to 15%.
— Jai Mundhra
So how do we manage the risk management for those portfolios that have originated at let us say INR165K of a 10-gram gold loan?
— Jai Mundhra
While at the portfolio level the LTV is very respectable, very manageable, how do you manage the risk in that portfolio?
— Jai Mundhra
As we had a higher margin when we gave that loan, so that is not giving us any concern at this point in time.
— N. Kamakodi
So that is not a concern at this point in time.
— N. Kamakodi
Like you have started seeing in your DuPont analysis the operating profit margin has started holding up and the we had to go for extra provision for NPA because honestly speaking, somewhere around 2013-'14 we decided to have our net NPA always above 1 %, because keeping it less than 1 % was not giving us elbow room to manoeuvre things and it was giving us extra mental pressure to manage, and that was reasonably good compared to the peers in the sector.
— N. Kamakodi
See, at least fortunately, this difficult question I have to pass and Vijay Anandh has to answer.
— N. Kamakodi
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Q&A — 6 exchanges
Q
Yes, hi, good evening, sir, and thanks for the opportunity. And many congratulations on a meaningful career at City Union Bank, driving the bank to a very impressive height, and creating shareholder value. Sir, my first question is regarding gold loan. So far, the gold loans have grown at a much faster pace than overall loans, and I believe this is not an asset quality issue at all. But I just wanted to understand the risk practices here in the sense that, let's say, in January, February, from the peak of gold loan prices, gold prices have come down by 10% to 15%. So how do we manage the risk
N. Kamakodi
See, thankfully, we had the experience of 2014 when you had a similar gold price crash, which gave us some sleepless nights, but ultimately we ended up in not missing much but about had to book a loss of about INR5 crores or something like that only, but we had to go through a painful process of auctioning and things like that. So, keeping all those things into account, when they say the gold price crossed beyond say INR12,000 and things like that, we did not increase the per gram rate beyond that. So, when it went to that INR15,000, INR16,000 and all, we had continued to give at the range of
Q
Thanks a lot. It's been amazing 15 years that you have given us, trying to understand the bank and the sector in detail. Just two questions from my side. One is internally at the Board level; do you have an upper limit on how much of gold loans the bank can take, and has there been any change recently? Number one. And the second question, when you look at the demand for MSME loans that you're seeing on the ground, if you could just kind of give some colour as to is this just simply working capital utilization that is going up taking advantage of raw material prices, cash flow mismatches, what
N. Kamakodi
Yes, thank you, Mahesh. By the way when you said you're trying to understand the bank maybe at least I think in 15 years is a long time to understand, I think I hope you have that part is through because you have been interacting for quite some time and thanks for all the support and interaction whatever we had. See, on gold loan, basically, the 30, 31, 32 itself is like say we are almost at the upper band. Even if it is a, what is that sweet Kheer, you will not be able to take beyond couple of cups or so. You need limit for everything. Maybe there could be that 1% or 2% here and there increas
Q
Yes, hi, sir. Am I audible?
Management
Q
Yes, hi. Thanks for taking my questions, sir. So, a few minutes ago you said that with the new ECL regulations coming in, the banks would have to adjust through the opening balance itself and not through reserves, and hence not much incremental provisions will be required on the ECL front. However, the floor rates have been unchanged. So, I was wondering if, at this point, you would be more comfortable sharing your view on what the impact would be on the steady state credit costs? Yes, that's all.
N. Kamakodi
See, at least fortunately, this difficult question I have to pass and Vijay Anandh has to answer. But what I have to say is that if you had a chance to look into that 15-year figure, what we have given in our presentation, you can say in fact it is there in terms of credit cost post accounting for the recoveries from the written-off assets, the net provision in 2010-'11, it was 0.41, 0.15, 0.25, 0.5, 0.4, 0.5. It was 0.09 in '24-'25 and 0.04 in '25-'26 and all. The average works out to about 0.60 or so over the period of last 15 years. Now with the improved underwriting based on the AI and the
Q
It's been wonderful, sir. I've completed two years, and it's almost 25 months. I think, first of all, I hail from this town and I come with 28 years of experience and last 15 years I think I was in Bombay. From Bombay, I have moved to Kumbakonam. The major reason why I took up is that when I was interacting with Dr. Kamakodi and the Board, I was fully convinced that I should be here. I think my wavelength, my passion for what I wanted to do, was absolutely matching with where Dr.Kamakodi wants to take this bank to the next level, how he wants to take the bank to the next level. And I felt that
N. Kamakodi
Suresh, just adding to what he said, I think this question you should have reserved for the get-together tomorrow. It's a busy results season, sir, so I'm not sure whether I can make it. But yes, for whatever it is, I mean we just thought it'd be great to take his perspective and yes, to see. I mean, family and everybody is relocated to Kumbakonam, how is he handling those dynamics? Because these things are also at times important from fitting to the organization perspective, right, moving from Mumbai to Kumbakonam. Yes, my parents stay in this part of the town, so... Suresh Ganapathy: Okay. A
Q
Yes, thank you all for attending this call, and special thanks to Suresh, Mahesh, and all, because Suresh and all, perhaps we have been in touch for more than 15 years. I think even I remember the interaction we had in one of my travel to airport in the car itself. You all had been supportive of us over the period of time and because of you all I had a satisfying experience with the bank. And I thank you all for all the support you have given, and I am sure you will be continuing with the same support to Mr. Vijay Anandh. I look forward to meet you all tomorrow in person where we can discuss s
Management
Speaking time
N. Kamakodi
18
Jai Mundhra
9
Moderator
8
R. Vijay Anandh
6
MB Mahesh
6
K. Jayaraman
2
Soubir Samadder
2
Jignesh Shial
1
Suresh Ganapathy
1
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Opening remarks
Jignesh Shial
Yes, thank you, Dorwin, and good evening, everyone. On behalf of Ambit Capital, I would like to thank the management of City Union Bank for allowing us the opportunity to host 4QFY26 earnings call. We have along with us Dr. N. Kamakodi, MD and CEO; Mr. R. Vijay Anandh, Executive Director; Mr. V. Ramesh, Executive Director; and Mr. J. Sadagopan, CFO. I will now hand over the call to Dr. N. Kamakodi, MD and CEO of City Union Bank for his opening remarks. Over to you, sir.
N. Kamakodi
A hearty welcome to all of you for this investor call to discuss the audited results of the fourth quarter and the financial year ending 31st March 2026. I hope all of you have received the results and the presentation. As you all know, it has been 15 years since I was appointed as the MD and CEO of this prestigious institution with over 120 years of legacy. As you all know, as per the regulation in force, I am completing the maximum permissible tenure of 15 years on 30th April 2026, and I have to hand over the responsibilities of this great organization to my successor. Hence, with this investor call, I am signing off and passing on the reign to my successor, Shri R. Vijay Anandh, who will take charge with effect from 1st May 2026. This con call is my 60th call to the investor community and I am happy to see and interact with some of them since my first con call. Thanks to all of you and special thanks particularly to those with whom we have been traveling over 15 years. At this junct
R. Vijay Anandh
So, in terms of vision for '26-'27, with respect to advances, we should be 2% to 3% over and above the credit growth of the industry. However, our focus on MSME will remain same. Gold loans and secured retail will be an additional enhancer. MSME proportion will continue to dominate with 55%, 60%, followed by JL with 30% to 35%, and remaining we are planning to do this through secured retail. We will focus more on branch-led business now that we have 1,000 distribution branch channels. Our business through third-party on an overall bank book we envisage to be only between 1% to 2%. Hence our focus on secured products will continue for the year. Our endeavour on the CDR continues to be 85% to 87% based on the credit growth. We are launching a segment-specific product for women and senior citizens, and we are also enhancing the product proposition in savings and current accounts. With respect to fee income to other income, we will be in the range of 55% to 60% as like last year, contribut
N. Kamakodi
Yes, I forgot to add this point of opening our 1,000th branch. I am happy to announce that today morning we completed the opening of the 1,000th branch near our headquarters, Kumbakonam. So, we wanted to achieve this milestone before I lay down my office. So, what we have done is that every year we open about 75 branches and last year also we opened 75, we closed the year with about 950. So, for the 75 branches, the first of branches about 50 branches we opened in the first month itself, in the April itself. So, the remaining 25 will get opened towards the year end. So the point is that, like the same pace of 75 branches is what we expected to grow and as Vijay Anandh said, normally like we will have branches getting opened in the fourth quarter and they used to majority of them coming close to breakeven in the first year and some of them slipping into the second year. So, there will be some changes in that thing, but overall level at a macro level, they are going to add for our increa
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