City Union Bank's Q3 FY26: Strong Growth, Digital Push, and Robust Asset Quality

City Union Bank reported a 21% year-on-year growth in both deposits and advances, with Net Interest Income (NII) growing by 28% for Q3 FY26. Profit After Tax (PAT) also increased by 16% for the quarter.

The bank showed significant improvement in asset quality, with Gross NPA reducing to 2.17% and Net NPA decreasing to 0.78% in Q3 FY26. The Provision Coverage Ratio (PCR) stood at 83%.

The bank aims for loan growth in the high teens, aligning deposit growth with credit growth, with a strong focus on granular retail deposits and CASA. They target a Credit Deposit (CD) ratio between 85% and 86%.

City Union Bank has launched several digital offerings, including CUB SalarySe and CUB Kavachh credit cards, UPI ATM for cardless withdrawals, an AI Conversational BOT, and a Digital Lending Platform.

Management expects a stable Net Interest Margin (NIM) for Q4 FY26, with a variation of plus or minus 10 basis points. Return on Assets (ROA) is projected to remain at 1.5% plus for financial year 2026.

The bank maintains a strong Capital Adequacy Ratio (CRAR) of 20.13% and Tier-1 capital adequacy of 19.18% as of December 31, 2025, which is well above regulatory requirements.

As of December 31, 2025, Cash Credit & Demand Loans constitute 63% of the loan book, Term Loans 36%, and Bills Purchased & Discounted 1%. Key sectoral deployments include MSME, Agriculture, and Jewel Loans Non-Agri.