City Union Bank Q1: standalone PAT ₹383 Cr up 25% YoY, asset quality sharply improves

City Union Bank opened FY27 with a record standalone quarterly net profit of ₹382.6 Cr, up 25.1% year-on-year from ₹305.9 Cr and 6.4% sequentially over Q4's ₹359.6 Cr. Interest earned (topline) rose 23.7% YoY to ₹1,984.99 Cr and total income reached ₹2,228.6 Cr; operating profit before provisions climbed 28.7% YoY to ₹580.6 Cr, though it was essentially flat QoQ (+0.2%). Net profit margin expanded to 17.2% (from 16.5% a year ago and 16.8% last quarter), while the OPM-on-interest measure eased to 29.3% QoQ (from 31.2%) but stayed above the year-ago 28.1%.

The print sits against management's own FY26 concall guidance, and largely confirms it. Operating expenses grew ~15.5% YoY (employee cost +17%, other opex +14%), squarely inside the 15-18% band management flagged for front-loaded branch expansion (75 new branches planned in FY27) — so the cost build is on plan rather than a surprise. ROA came in at 1.57% annualised, still short of the 1.65-1.67% FY27 exit target but inching up from 1.56% (Q4) and 1.55% (year-ago). Interest expended rose 18.9% YoY on higher deposit costs, the key pressure point analysts had flagged into the print; NIM stability will be the concall focus. A lighter provision charge of ₹78 Cr (vs ₹120 Cr in Q4 and ₹70 Cr a year ago) supported the sequential PBT.

The stock went into the print at ₹227.67, up 13% over the past month of trading.

For context: this is the highest quarterly PAT in the last 6 quarters on our records; PAT has now risen for 5 consecutive quarters; revenue is at a 6-quarter high.

Asset quality was the standout: Gross NPA fell to 1.73% from 2.99% a year ago and 1.91% last quarter, Net NPA to 0.61% (from 1.20%), with provision coverage at 85% including technical write-offs. Capital is robust at 21.73% CAR. No formal Street consensus for the specific quarter was published, but analysts had pencilled 15-20% PAT growth for FY27 — the +25% YoY Q1 print runs ahead of that pace, so we read it as a modest beat.