City Union Bank Limited

City Union Bank reported robust financial results for Q3 FY26, with Net Profit (PAT) growing 16% YoY to INR332 crores, up from INR286 crores in Q3 FY25. Operating profit also saw an 18% increase, reaching INR513 crores compared to INR436 crores in the prior year. For the nine months ended December 31, 2025, PAT stood at INR967 crores and operating profit at INR1,435 crores, both reflecting a 16% growth. The bank achieved a Return on Assets (ROA) of 1.53% for Q3 FY26 and 1.55% for the nine-month period, exceeding its long-term target of 1.5% plus.

The bank demonstrated strong balance sheet expansion, with both advances and deposits growing 21% YoY in Q3 FY26. Advances increased to INR60,892 crores from INR50,409 crores in Q3 FY25, while deposits reached INR70,516 crores from INR58,271 crores. This marks the highest credit growth since FY80, sustained for seven consecutive quarters. The average CD ratio for Q3 FY26 was 86%, and the CASA percentage to total deposits stood at 27%, with daily average CASA growing 19% YoY.

Asset quality continued its positive trajectory, with Gross NPA (GNPA) reducing to 2.17% in Q3 FY26 from 2.42% in Q2 FY26, and Net NPA (NNPA) falling to 0.78% from 0.9% in Q2 FY26, now below INR500 crores at INR469 crores. Slippages for the quarter were INR193 crores, significantly offset by recoveries of INR219 crores. The Provision Coverage Ratio (PCR) with technical write-offs improved to 83% from 77% last year, and without technical write-offs, it reached 64% from 59% in Q3 FY25.

Net Interest Margin (NIM) expanded significantly to 3.89% in Q3 FY26 from 3.63% in Q2 FY26. This improvement was primarily driven by a 14 bps sequential reduction in the cost of deposits to 5.57% due to repricing benefits and an increased gold loan portfolio with fixed rates. The bank also noted a positive impact from the reduced CRR ratio. The cost-to-income ratio improved to 48.56% in Q3 FY26 from 49.16% in Q2 FY26, reflecting enhanced operational efficiency.

City Union Bank's strategic focus remains on core MSME, gold loans, and secured retail segments. Management guided for continued high-teen growth for FY26, maintaining ROA above 1.5%, and a cost-to-income ratio between 48-50%. The bank's net worth crossed the INR10,000 crore mark, an important milestone. The bank also participated in the Certificate of Deposit market to gain experience, while its primary focus remains on granular retail deposits.

The bank announced that Professor V. Kamakoti, a Board member and Director of IIT Madras, was honored with the Padma Shri award. Additionally, Shri K. Subramanian, a Chartered Accountant with 38-39 years of experience, was inducted into the Board. These changes are expected to bring valuable contributions to the bank's governance and strategic direction.