City Union Bank Declares 1:3 Bonus Issue and Rs 2/Share Dividend
City Union Bank has announced a bonus issue in the ratio of 1:3, which means that shareholders will receive one equity share for every three fully paid-up shares held as on the record date. The record date has not been announced yet, but the bank has stated that the bonus shares will be issued within two months from the date of board approval.
In addition to the bonus issue, the bank has also recommended a dividend of Rs 2 per share for the financial year 2025-26. However, the payment of the dividend will be subject to approval by the shareholders at the ensuing annual general meeting.
Q4 Results: 24.9% Surge in Profit
City Union Bank reported a 24.9% surge in profit at Rs 360 crore in the fourth quarter of the previous fiscal. The lender had posted a net profit of Rs 288 crore in the January-March period a year ago. The net interest income, which is the difference between interest earned and interest paid, grew 30.9% to Rs 786 crore in the fourth quarter, compared to Rs 600 crore in the same period of the last fiscal.
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Asset Quality Improves
The bank’s asset quality also improved during the quarter under review, with the gross non-performing assets (NPA) ratio at 1.9%, down from 2.2% in the previous quarter. In absolute terms, the gross NPA was at Rs 1,273.08 crore, down from Rs 1,320 crore in the previous quarter.
The net NPA ratio fell 10 basis points to 0.68% from 0.78% in the preceding quarter. In absolute terms, the net NPA fell to Rs 449.42 crore from Rs 469.34 crore.
To learn more about NPA ratio and its impact on the banking sector, read our in-depth analysis.
Provision and Contingencies Advance
As a result of the improvement in asset quality, the bank’s provision and contingencies advanced to Rs 120 crore, compared to Rs 78 crore in the same period a year ago.
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City Union Bank Share Price Today
City Union Bank shares closed 3.31% higher at Rs 271.21 per share, after rising as much as 4.57% to Rs 274.50 apiece. This compares to a 0.81% advance in the NSE Nifty 50 Index. The stock has risen 52.89% in the last 12 months and fallen 6.74% year-to-date.
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What Investors Need to Know
The bonus issue and dividend declaration are positive developments for City Union Bank investors. The improvement in asset quality and the growth in net interest income are also encouraging signs. However, investors should keep an eye on the bank’s provision and contingencies, as well as the overall performance of the banking sector.
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