City Union Bank PBT in Q1 down 15% to Rs 199 cr on provisions

PBT for the quarter was impacted on account of additional provision of Rs 100 crore towards Covid-19

City Union Bank (CUB) has reported a profit before tax (PBT) of Rs 199.03 crore during the quarter ended June 30, 2020 as against Rs 235.64 crore. PBT for the quarter was impacted on account of additional provision of Rs 100 crore towards Covid. 

The lender had already made a provision of Rs 125 crore for Covid-19 as on March 31, 2020 and during the current quarter it has made an additional provision of Rs 100 crore to meet future contingencies arising out of the pandemic. Thus, the total provision in this regard made by the bank as on June 30, 2020 is Rs 225 crore.

The gross NPA as on June 30, 2020 was at 3.9 per cent and net NPA was at 2.11 per cent (the Gross NPA as on March 31, 2020 was at 4.09 per cent and net NPA was at 2.29 per cent). The Provision Coverage Ratio was at 68 per cent. 

Net interest margin stood at 3.98 per cent in Q1FY21 versus 4.11 per cent in Q1FY20. 

The bank has extended the option to all the borrowers to avail moratorium as per the RBI instructions. Though it had given a moratorium option to every customer, accounts with an exposure of 87.55 per cent have paid at least one monthly installment/interest (excluding certain loan categories such as joint loans and advances to staff) since grant of moratorium. Accounts with an exposure of 70.17 per cent have paid in full or four months (till June 2020) and only 12.45 per cent have fully used the moratorium. 

In terms of the January 1, 2019 RBI Circular on the MSME sector on restructuring of standard advances, during Q1FY21 the bank restructured 17 standard accounts amounting to Rs 68 crore. As of June 2020, total number of restructured accounts was 166, amounting to Rs 388 crore and the required provision of Rs 11.76 crore has been made fully.