City Union Bank delivered robust financial performance in the third quarter, with net profit rising 16% year-on-year to ₹332 crore compared with ₹286 crore in the corresponding period last year. According to The Hindu BusinessLine, the bank demonstrated steady operational performance with total income growing 17% to ₹2,001 crore during Q3FY26. The profit growth was supported by significant improvements in key financial metrics during the quarter, with the bank achieving over 20% growth in both deposits and advances for the first time in many quarters.
The bank's net interest income increased sharply by 28% to ₹752 crore, up from ₹587.7 crore a year ago, reflecting better balance-sheet traction and core lending performance. As reported by The Hindu BusinessLine, Net Interest Margin (NIM) saw a rise and exceeded the company's own guidance, reaching 3.89% for Q3FY26 compared to 3.58% in Q3 FY25. This substantial growth in net interest income was driven by faster repricing of deposits and increase in gold loan portfolio with fixed rate component, indicating improved operational efficiency and stronger core banking operations during the quarter.
Asset quality trends showed marked improvement during the quarter, with gross non-performing assets declining to 2.17% from 3.36% in the corresponding quarter last year. According to The Hindu BusinessLine, net NPAs were decreased to 0.78% in the current quarter from 1.42% in Q3 FY25. The bank reported that Gross NPA per cent for Q3 FY26 was reduced to 2.17% from 3.36% in the corresponding quarter last year, with gross NPA showing sequential decrease for the past 11 quarters. These improvements suggest enhanced risk management and collection efficiency across the bank's loan portfolio, with the situation in the MSME sector being good and improving as evidenced by a decline in their Special Mention Accounts.
Total advances increased 21% for Q3 FY26 to ₹60,892 crore from ₹50,409 crore in Q3 FY25, while total deposits stood at ₹70,516 crore compared to ₹58,271 crore in the corresponding period last year, registering 21% growth. As reported by The Hindu BusinessLine, MSME loans made up almost 39% of the total loan book at ₹23,836 crore. The yield on advances for Q3 FY26 improved to 9.73% compared to 9.66% in Q2 FY26, while gold loan saw a year-on-year growth of 33% and stood at ₹17,209 crore as of December 2025. MD & CEO N Kamakodi noted that the improved yield on advances and term deposits repricing have all helped in profitability.
With his 15-year tenure ending in April 2026, Kamakodi confirmed that the bank had already submitted the names of potential candidates to the RBI in the second week of December and is awaiting approval. As reported by The Hindu BusinessLine, he stated that "the matter is under consideration and we will share more information once the regulator gets back to us." Ahead of the earnings announcement, shares of City Union Bank Ltd closed at ₹286.70 on the NSE, up ₹2.95 or 1.04% for the day, according to CNBC TV18. The positive market response reflects investor confidence in the bank's steady operational performance and improving financial metrics during the quarter.
