City Union Bank has reported a 27 per cent year-on-year rise in net profit to ₹416 crore for the second quarter of FY27, as strong growth in core lending income and fee earnings more than offset higher provisions at the Kumbakonam-headquartered private sector lender. The bank had earned ₹329 crore in the July–September quarter of FY26.
The Board of Directors approved the unaudited results for the quarter and half-year ended September 30, 2026 at its meeting on Wednesday, October 28. Shares of the bank rose as much as 10 per cent intraday to ₹233.70 on the BSE after the numbers were announced.
Core income and fees power the quarter
Net interest income (NII) rose 31 per cent to ₹873 crore from ₹667 crore a year earlier. Interest income grew 27 per cent to ₹2,092 crore, while interest expenses rose a slower 24 per cent to ₹1,219 crore, lifting the bank’s net interest margin to 3.87 per cent.
Non-interest income climbed 35 per cent to ₹350 crore. With operating expenses up 24 per cent to ₹562 crore, operating profit jumped 40 per cent year-on-year to ₹661 crore, and was up about 14 per cent from ₹581 crore in the June quarter.
The bank stepped up its buffers during the quarter. It made a bad-debt provision of ₹120 crore, set aside ₹27 crore towards standard assets and created a contingent provision of ₹50 crore for unforeseen economic uncertainties.
Balance sheet growth accelerates
According to the bank’s investor presentation, advances grew 26 per cent year-on-year to about ₹72,400 crore, while deposits rose 21 per cent to about ₹83,900 crore. Total business expanded 23 per cent to roughly ₹1.56 lakh crore.
Return on assets stood at 1.62 per cent, above the bank’s long-term average of over 1.5 per cent, and return on equity was 15.01 per cent.
Asset quality improves further
Gross non-performing assets declined to 1.44 per cent of advances at the end of September from 1.73 per cent at the end of June. Net NPA eased to 0.48 per cent from 0.61 per cent in the previous quarter and 0.90 per cent a year earlier. Provision coverage stood at 82 per cent including technical write-offs.
The bank remains well capitalised, with a capital adequacy ratio of 21.26 per cent under Basel III, of which core capital accounted for 20.43 per cent.
First-half performance
For H1 FY27, City Union Bank’s net profit rose 26 per cent to ₹798 crore from ₹635 crore in the first half of FY26. NII for the half-year grew 31 per cent to ₹1,693 crore, and operating profit increased 35 per cent to ₹1,241 crore.
The numbers make City Union Bank one of the stronger performers among India’s old private sector banks this earnings season, combining above-30 per cent core income growth with steadily falling stressed assets.
