New Delhi: City Union Bank Ltd reported a steady set of numbers for the quarter ended September 30, 2025, with net profit rising 15% year-on-year to ₹329 crore. The improvement came on the back of strong interest income, a cleaner loan book, and continued control over operating costs, according to the filing made by the bank to the exchanges late Tuesday.
The private-sector lender, headquartered in Tamil Nadu, said its overall income grew to ₹1,912 crore, compared with ₹1,660 crore in the same period last year. Interest income alone accounted for ₹1,653 crore, up from ₹1,434 crore, reflecting solid growth in lending activity.
Higher Income and Lower Provisions Boost Profit
Net interest income (NII)—the difference between what the bank earns on loans and pays on deposits—climbed 14.4% to ₹666.5 crore from ₹582.5 crore in Q2 FY2024. Operating profit also moved up, reaching ₹471 crore, compared with ₹428 crore a year earlier.
Provisions and contingencies, a line item closely tracked by analysts, fell to ₹57 crore from ₹70 crore, suggesting lower stress in the loan portfolio. The cost-to-income ratio stayed roughly flat, pointing to stable efficiency. Non-interest income from services like transaction fees, commissions, and remittances added modestly to revenue. Most of the profit, however, continued to come from the bank’s traditional lending business.
The quarter saw a clear turnaround in asset quality. Gross non-performing assets (NPAs) declined to 2.42% of total advances as of September 30, from 3.54% a year earlier. Net NPAs almost halved, coming down to 0.9% from 1.62% in the same quarter last year. Sequentially, the improvement was visible too; gross NPAs had stood at 2.99% at the end of the previous quarter.
Executives attributed the fall in bad loans to stronger recovery drives and tighter lending filters, helped by a relatively stable credit environment. The bank’s provisioning coverage ratio remained in line with regulatory requirements under RBI’s capital adequacy norms. Both advances and deposits grew during the quarter, driven by healthy traction in the retail and SME segments.
Shares Gain After Results; Brokerages Stay Positive
Following the results, City Union Bank shares gained ground in trading on November 3. The stock closed 3% higher at ₹235.90 on the BSE, while on the NSE it jumped 9% to hit a 52-week high of ₹257.80. The bank’s market capitalisation rose to about ₹18,829 crore.
Brokerages largely maintained their positive stance, citing consistent earnings and healthier asset quality. Analysts noted that City Union Bank’s trajectory mirrored the broader recovery seen among private banks as credit demand and repayments stabilise after the pandemic. The Q2 results were disclosed under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ensuring transparency in financial reporting.
The lender also confirmed that its capital adequacy ratio remains comfortably above the levels mandated by Basel III norms. All results were prepared in accordance with the Companies Act, 2013, and the Banking Regulation Act, 1949, and reviewed by statutory auditors.
The improvement in NPAs and lower provisioning expenses reflect compliance with the RBI’s Prudential Framework for Resolution of Stressed Assets, which encourages banks to identify and address weak accounts early. The bank’s provisioning standards follow Income Recognition and Asset Classification (IRAC) guidelines. No material audit qualifications or regulatory deviations were reported for the quarter.
With stronger earnings and cleaner assets, City Union Bank appears set for a steady second half of FY2025. The combination of rising interest income, controlled costs, and a reduced provisioning burden points to stable margins going forward. The lender continues to emphasise governance and compliance as key priorities, maintaining its standing as one of the country’s more conservatively managed private banks.
