City Union Bank (CUBK IN) – Q4FY26 Result Update – Branch footprint to support growth – BUY
Published on 28 Apr 2026
CUB saw a good quarter with core PPoP beat of 8.6% led by better fees and TWO recovery which allowed creation of buffer provisions of INR 500mn. While loan growth was higher at 9.7% QoQ, NII grew by 4.5% suggesting back-ended growth. Bank guided to mid to high teens growth with continued focus on MSME, gold and secured retail. We maintain loan CAGR of 17% over FY26-28E. Revised LCR norms would free-up INR 35-40bn of liquidity which could provide further LDR leeway that may cushion NIM. There is no material change in core PAT; CUB may continue to deliver core RoA of 1.45-1.50%. We keep multiple at 1.7x on FY28 ABV and maintain TP of INR 310. Retain ‘BUY’.
