City Union Bank Q2 FY27 Results Analysis: PAT Jumps 26.57%, GNPA at Multi-Year Lows (CUB)

City Union Bank Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 2,442.46 Cr (+27.71% YoY) and PAT growth of +26.57% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

CUB delivered PAT of Rs.415.91 Cr (+26.57% YoY) with PPOP up 40.44% YoY, asset quality at multi-year bests (GNPA 1.44%, NNPA 0.48%), and ROA of 1.62% within the guided band. Cost-to-income and credit cost are running inside guidance, though the effective tax rate of 23.11% has missed the ~20% guide for two straight quarters. Authorized share capital was doubled with RBI NOC, groundwork for the AGM-authorized QIP.

Key Investment Insights

Key Positives

• Net profit grew 26.57% YoY to Rs.415.91 Cr, the fourth consecutive quarter of sequential PAT acceleration
• PPOP grew 40.44% YoY to Rs.660.91 Cr, outpacing NII (+30.94%) and PAT growth
• GNPA fell to 1.44% and NNPA to 0.48%, from 2.42%/0.90% a year ago
• Cost-to-income improved to 45.96% from 49.16% YoY, inside the 47-48% guided band
• Advances grew 26.57% YoY and deposits 20.73% YoY
• Ex-buffer credit cost of 0.40% annualized matched the guided steady state; Rs.50 Cr contingent buffer booked
• Retail banking segment result grew 60.88% YoY with margin expanding ~440 bps to 21.06%
• Annualized ROA of 1.62% within the guided 1.55-1.60% FY27 band

Risk Factors

• Effective tax rate of 23.11% missed the ~20% management guide for a second consecutive quarter, a 256 bps YoY drag on PAT
• Provisions rose 110.53% YoY to Rs.120.00 Cr, including the Rs.50 Cr contingent buffer
• Opex grew 16.34% QoQ, outpacing 9.60% QoQ total income growth after July staff hikes
• Borrowings more than doubled YoY (+141.95%), with debt-equity rising to 0.15 from 0.08
• H1 operating cash flow was negative at -Rs.255.07 Cr vs +Rs.1,921.37 Cr in H1 FY26, though structural for a growing bank