City Union Bank opened 3.5% higher at Rs.121 and went up further to Rs.124, at which level profit booking came in and it is back to trading at its opening level.
The company posted its earnings for Q1FY21 and the market seems to have been more enthused with its improvement in asset quality rather than fall in profit.
It reported a 17% (YoY) decline in net profit at Rs.154 crore and dip has been on account of increased provisioning for covid.
The Bank provided Rs.50 crore for bad debt, Rs.100 crore for contingency from covid and provisioning was actually down QoQ to Rs.157 crore. Its total provisioning tally stood at Rs.202 crore.
Its provision coverage ratio was at 68% while Capital adequacy ratio (CAR) stood at 16.77% (BaselIII), of which core CRAR was at 15.69%.
In terms of asset quality, Gross NPA fell from 4.09% to 3.9% and Net NPA too declined from 2.29% to 2.11% (QoQ).