City Union Bank Ltd – 120 Years Old, 875 Branches Strong, Still Trying To Look Sexy At P/E 12.8
1. At a Glance
City Union Bank (CUB) is like that old family-owned jewellery shop in Kumbakonam – vintage, steady, loyal customer base, but forever trying to prove it’s still relevant in a world of Paytm wallets and UPI. With ₹63,500 Cr deposits, ₹53,000 Cr loan book, and NPAs under control (Gross NPA down to 3.09%), it’s finally acting like a responsible private bank. But CASA ratio slipping below 29% shows they’re no HDFC or ICICI when it comes to low-cost deposits.
2. Introduction
Founded in 1904, City Union Bank is practically a colonial-era survivor. While others were fighting for independence, CUB was busy disbursing loans to wholesale traders. Fast forward to FY25 – they’re still doing the same thing, only now they’ve added gold loans, MSME lending, and even co-branded CSK/SRH credit cards (because nothing says prudent banking like free match-day tickets).
Unlike flashy fintechs burning VC money, CUB actually earns profits: FY25 PAT ₹1,165 Cr, ROA ~1.55%, and ROE ~12.6%. But the market doesn’t shower the same love – P/E at 12.8 is closer to PSU banks than to premium private players.
So, should investors see this as a hidden gem or just another regional bank stuck in Tamil Nadu traffic?
3. Business Model – WTF Do They Even Do?
CUB works on the “boring is beautiful” model:
MSME Lending: 65% of loans are cash credit/demand loans. Their bread and butter.
Gold Loans: ₹14,270 Cr portfolio (27% of advances), with average LTV at 61%. NPA at 0.04% here – probably safer than keeping gold with your cousin.
Sector Split: Agriculture (17%), housing (5%), retail (12%), CRE (7%), NBFCs (3%). Zero drama with large industries or infra.
Deposits: ₹63,526 Cr deposits, growing steadily. CASA ratio fell to 28.5%, meaning they rely more on term deposits than cheap CASA.
Digital: 95% of transactions are digital, with WhatsApp banking, UPI-ATM withdrawals, BBPS. But don’t expect Silicon Valley-level UX – this is still a conservative south Indian bank.
4. Financials Overview
Metric
Latest Qtr (Jun’25)
YoY Qtr (Jun’24)
Prev Qtr (Mar’25)
YoY %
QoQ %
Revenue (₹ Cr)
1,605
1,389
1,533
15.6%
4.7%
PAT (₹ Cr)
306
264
288
15.9%
6.3%
EPS (₹)
4.13
3.57
3.89
15.7%
6.2%
Commentary: Consistent growth, no fireworks. It’s like a 2BHK SIP – safe, predictable, and never viral on social media.
