City Union Bank (CUBK IN) – Q2FY27 Result Update – Loan CAGR over FY27-29E could be between 16-20% – BUY
Published on 29 Oct 2026
CUB saw a good quarter with core PAT beating PLe by 3.7% led by better NII/fees; other income included ARC sale of INR1.07bn which provided cushion against higher opex and allowed to create contingent provision of INR0.5bn. Bank reiterated guidance of growing loans 2-3% above industry; we are factoring loan CAGR of 17% over FY26-28E. Portfolio mix was guided to be: gold at 31-32% (currently 30%), MSME at 55-60% and secured retail 10%. One-time ECL impact has been lowered from 60-65bps to 40-45bps due to improved portfolio quality. We keep multiple at 1.7x on Sep’28 ABV and maintain TP at INR250. Retain ‘BUY’.
