Buy City Union Bank; target of Rs 225: Sharekhan

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Sharekhan's research report on City Union Bank

We interacted with City Union Bank’s management to understand the present business scenario, asset quality, and growth outlook. Management indicated that collection efficiency has been improving on m-o-m basis and is near-normal levels now. The bank is well placed on the asset-quality front, with a manageable level of restructuring and adequate provision cover. City Union Bank trades at 2.1x/1.9x its FY2022E/FY2023E BVPS. Factors such as increasing retail focus, being adequately capitalised (Tier-1 at ~16.3%), and incremental lending to better-rated borrower(s) are positives.

Outlook

We maintain our Buy rating on the stock with a revised price target (PT) of Rs. 225.

For all recommendations report, click here

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