City Union Bank jumps 9% on Q2 results; brokerages retain Buy, here's why

City Union Bank share price today: Shares of Tamil Nadu-based lender City Union Bank surged 9 per cent to hit a 52-week high of ₹257.80 after it reported strong numbers for the September 2025 quarter (Q2FY26).

 

At 03:00 PM, CUB's share price was trading 9 per cent higher at ₹257.1 per share on the NSE. In comparison, NSE Nifty50 was down 0.62 per cent at 25,604 levels. The market capitalisation of the bank stood at ₹18,829 crore. The stock has recovered 79 per cent from the 52-week low of ₹142.91 touched on March 27, 2025.

City Union Bank Q2 results

City Union Bank reported a 15 per cent year-on-year (Y-o-Y) increase in net profit to ₹328.6 crore during the September 2025 quarter (Q2FY26) compared to ₹285.2 crore in the year-ago period. The private sector lender's total income increased 15 per cent to ₹1,912 crore in the reported quarter. 

 

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The Tamil Nadu-based bank's net interest income (NII) grew 14 per cent to ₹666.5 crore from ₹582.5 crore in Q2FY25. The bank's asset quality showed an improvement as gross non-performing assets (NPAs) declined to 2.42 per cent at the end of the September quarter from 3.54 per cent a year ago. Similarly, net NPAs declined to 0.9 per cent, as against 1.62 per cent in the year-ago period.  As a result, provisions and contingencies declined to ₹57 crore from ₹70 crore in the second quarter of the last financial year.

City Union Bank Q2 results analysis - Anand Rathi

According to analysts at Anand Rathi, City Union Bank reported a higher-than-estimated earnings growth in Q2, on the back of healthy 18.7 per cent Y-o-Y credit growth and a strong 11.3 per cent Y-o-Y growth in core PPoP. 

 

The key positives for the private lender included negative net slippages at 70 basis points (bps) of loans, 9 bps sequential marginal improvement in margin, strong credit growth in the core MSME segment, and a strong balance sheet, the brokerage said in its note. 

 

"With likely higher credit growth than the system and modest credit cost, its earnings are expected to be healthy. Thus, we retain a 'Buy' rating on the stock with a 12-month target price of ₹295, valuing it at 1.7x P/BV on its FY28e book," it added.

Axis Securities

In its note, Axis Securities said the bank's growth engine has started to fire, with credit growth at a decadal high, and the management remains confident of sustaining the momentum, supported by healthy growth visibility in the MSME and gold segments and a gradual ramp-up of the retail segment. 

 

Despite robust growth delivery in H1FY26, significantly above industry growth, the management has reiterated its guidance of maintaining credit growth 2–3 per cent above industry growth, which, according to the brokerage, is conservative. However, the bank is not averse to accelerating the pace of growth without compromising on asset quality. 

 

The bank is on track to ramp up its retail portfolio, supported by its branch network (90 per cent mix) and the DSA channel (10 per cent mix), and expects to break even in FY26 and turn RoA accretive from FY27 onwards. Axis Securities has maintained a 'Buy' rating on the stock with a target price of ₹275.