city union bank investor presentation final 16.08.10

7/23/2019 City Union Bank Investor Presentation Final 16.08.10

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Investor Presentation August 2010


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Disclaimer

No representation or warranty, express or implied is made as to, and no reliance should be placed on the

airness, accuracy, completeness or correctness o such inormation or opinions contained herein! "he

inormation contained in this presentation is only current as o its date! #ertain statements made in this

presentation may not be based on historical inormation or acts and may be $orward loo%ing statements&,

including those relating to the ban%'s general business plan's and strategy, its uture (nancial condition andgrowth prospects and uture developments in the industry and regulatory environment! Actual results may

di)er materially rom these orward*loo%ing statements due to a number o actors, including uture changes

or developments in the ban%'s business, its competitive environment and political, economic, legal and social

conditions in India! "his communication is or general inormation purpose only, without regard to speci(c

ob+ectives, (nancial situations and needs o any particular person! "his presentation does not constitute an

o)er or invitation to purchase or subscribe or any shares in the ban% and neither any part o it shall orm the

basis o or be relied upon in connection with any contract or commitment whatsoever! "he ban% may alter,

modiy or otherwise change in any manner the content o this presentation, without obligation to notiy any

person o such revisions or changes! "his presentation should not be copied andor disseminated in any

manner!


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"able o contents

1! #ity -nion .an% /verview rowth tory 3*11

2! /wnership Pattern 12*13

4! 5anagement 16*17

3! 8inancial Perormance 19*42

6! trategy 4:*4;

:!


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1! #ity -nion .an% /verview rowth tory


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howcasing steady perormance on an ongoing basis =

RoA and RoE at 1.5% and 20.5% respectively, which is considered healthy in the bankin space

Rated as !o.1 by "hartered #inancial Analyst $aaine

&teady rowth ' ()siness rowin at a "A*R o+ 2% and !et -rot at a "A*R o+ /0% in last ve years

nicant improvement in asset )ality over the years. !et !-A ' 0.5% and -rovision "overae Ratio

#)t)re plans +or e3pansion o+ branch network to 500 (ranches in ne3t / years

id proress on the technoloy +ront with 100% b)siness )nder "(& and &tate o+ the Art 4echnoloy plat+o

#-. is well positioned to capitali>e on the huge growth opportunities in the ban%ing sector

ell capitalied6 "AR ' (asel 77 ' 1/.89% as on $arch /1, 2010

on and consistent track record o+ protability ' -rot and dividend payo)t in all 100 ; years o+ operation

"orporate -ractices6 All 7ndependent < -ro+essional directors6 "ontin)ity in $anaement ' only 9 "E=s s


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?ey milestones

"a%e over o #ommon@ealth .an% imited

1>5

Preerential allotment or eBuityshares strengthening ban%'scapital adeBuacy ratio

2007

1>08

Incorporation o the .an%

1965

Amalgamation o C"he #ity8orward .an% imited' andC"he -nion .an% imited'with our .an%

1998

Initial Public /)ering DIP/EFisting .an%'s shares onthe .G, NG 5G

Gntered into agreement with "#

or core ban%ing solution $Huart>&

2002

2003

/btained licenses to act as

a agent or procuring lieinsurance generalinsurance business

85

cheduled ban% since

22!04!1936


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trong presence in the outh

A network of 222 branches of which 193 branches are located in South India and 139 in Tail !adu alone

&tate!o o+

(ranches&tatewise %o+ (ranches

% o+ o)r()siness

"amil Nadu 149 :4 ;4

Andhra Pradesh 29 14 9

?arnata%a 16 ; :

5aharashtra 12 6 :?erala 10 6 2

u+arat : 4 1

/thers 11 6 4

4otal 222 100 100

&tate wise branches


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.ranch Gxpansion

"e ha#e recei#ed $icense fro %eser#e &ank of India to o'en 62 ore branches in #arious states

within a (ear) *ut of which +0 branches are in Tier I and Tier II centres and 22 ,orebranches 'lanned to o'en under Tier III to -I centres)

&tate4ier 7 < 77centres

4ier 777 to ?7centres

"amil Nadu 20 22

Andhra Pradesh 6

?arnata%a 6

5aharashtra 3

#hattishgarh 1

New Kelhi 2

/rissa 1

Pun+ab 1

-ttar Pradesh 1

4otal 80 22

&tate wise (ranch E3pansion planned


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Providing a wide array o services D12E

Implementation o core ban%ing at all the branches enabling customers to operate their accounts rom any

o the branches

1:7 own inter connected A"5s nationwide as on August 16, 2010F Access to A"5s through #ashtree, N8,

LIA tie*ups

LIA debit card access worldwide


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Providing a wide array o services D22E

8orex services to the importers exporters

"rade credit acility to importers

Mandling overseas direct investments and oreign direct investments

International ban%ing operations cross border ban%ing through correspondent ban%ing relationships with

M.# .an%, @achovia .an%, tandard #hartered .an%, #ommerce .an% others

8orex dealing services through orward contracts, etc!

"ie up with Koha .an% or arrangement o money transer

Krawing arrangement rom ingapore with .an% o India

5oney 2 India ervice "ie up with I#I#I .an% or und transer

Arrangement with -AG Gxchange and 5a+an exchange or money transer

&ervices < +acilities @ 7nternational bankin


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/)ering the best o both worlds and more

8ocused approach towards 5G's

Plans to open branches in "ier II and "ier III cities

Gxperienced management team

8lexibility to enter ad+acent mar%ets and

businesses

Kiversi(ed product portolio

Migh operating expenses

Migh o ee income

/perating eOciencies

arge branch networ%

trong customer base

trong growth

Asset Buality

Migh


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2! /wnership Pattern


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A well diversi(ed investor base

=wnership prole as on /0th)ne 2010

&hareholders % holdin

" #apital Moldings 3!;9I# o India 3!:7

Nederlandse 8inancierings 3!:7

Ares Investments 4!90

Integrated Gnterprises DIE td! 4!90

Argonaut Lentures 4!::

Acacia Partners p! 4!03

Alpha ystems Pvt td 2!69

5/ Gmerging IlliBuid 8und 1!;6

?arur Lysya .an% 1!61

$aBor shareholders as on /0th)ne 2010

@ell diversi(ed ownership

ong term investors adding credibility and support to management

#ash management services o)ered to I# to improve #AA and customer base

.an% Assurance partner to I# and ran%ed No!1 in outh India consecutively or three years


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@10, we have iss)ed 0 mn e)ity shares with a +ace val)e o+ Re.1C@ each Rihts

E)ity sharesFG +or cash at a price o+ Rs.9C@ incl)din a premi)m o+ Rs.5C@ areatin to Rs.8 crores

to the e3istin e)ity shareholders o+ o)r (ank on rihts basis in the ratio o+ 1 Rihts E)ity share+or every 8 E)ity shares held.

"apital increases +rom Rs./20 mn to Rs.800 mn.


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4! 5anagement


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"ransparent C#orporate overnance' practices

All directors are 7ndependent and -ro+essional directors

"ode o+ cond)ct +or directors and senior manaement has been p)t in place

Disclos)re norms are strictly adhered to

?ario)s s)b@committees o+ (oard have been +ormed to oversee the operations o+ the (ank


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A well experienced and strong .oard D12E

!ame -role

5r! P!Laidyanathan,

#hairman

Me is a graduate in #ommerce, a 8ellow 5ember o the Institute o #hartered Accountants o India,

Associate 5ember o the Institute o #ost @or%s Accountants o India and Associate 5ember o

the Institute o #ompany ecretaries o India! Me has more than 46 years o experience in (nancial

services industry

5r! !

.alasubramanian, 5K

#G/

Me holds a 5aster degree in 5athematics, #AII. and PK85 and has 47 years o experience in the

ban%ing industry! Me had +oined #ity -nion .an% in 19;1 as a probationary oOcer and has since then

been associated with the .an% in various capacities! In 2006 he was appointed as the #hairman

#G/ o our .an% and thereater, in 2009 the


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A well experienced and strong .oard D22E

!ame -role

5r! ! .ernard,

Kirector

Me is a graduate in #ommerce and a 8ellow 5ember o the Institute o #hartered Accountants o

India! Me is a practicing #hartered Accountant o 41 years standing with expertise in the (eld o

Accountancy and "axation

5r! N ?antha ?umar,

Kirector

Me is a graduate in #ommerce and aw! Me has been in the .an%ing Industry or around 47 years!

Me has held %ey positions such as Gxecutive Kirector in #anara .an% and #hairman 5anaging

Kirector in yndicate .an%

5r! N!an%aran,

Kirector

Me is a .achelor o Gngineering D#ivilE and is a 5ember o Institute o Gngineers, India and has

been on the board since 2007! Me is a retired eneral 5anager rom 5s! Loltas International,

#hennai

5r! 5 Naganathan,

Kirector

Me is a graduate in #ommerce and a 8ellow 5ember o Institute o #hartered Accountants o

India! Me has been on the board since 2007 and is a senior partner in 5s! Price Patt #o!,

#hartered Accountants, #hennai!

5r!

#handramogan,

Kirector

Me is the #hairman 5anaging Kirector o Matsun Agro Product imited! Me has been in the dairy

processing and Ice cream business or around 40 years! Me visits the Indian Institute o

5anagement, Ahmedabad as a guest aculty!

5r! "!?!

4: years in the Qudiciary! Me was in Qudiciary Kepartment and held various position!

5r! #!

Kirector

Me retired as a whole time member o the Insurance


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3! 8inancial Perormance


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-artic)lars#I 200>@10in 7!R mnG

#I 200@0> in 7!R mnG

Absol)te*rowth % *rowth Direction

Keposits 102,736!9 72,0::!2 20,;;9!; 26!4

Advances :7,9:;!1 6:,7:2!2 12,103!9 21!4

"otal .usiness 1;1,712!9 147,927!3 42,773!6 24!:

ross NPA Htm 946!0 1020!7 *76!7

Net NPA Htm 49:!; :11!1 *213!3

ross NPA 1!4: 1!70Net NPA 0!67 1!07

810 perormance A snapshot

"otal .usiness o the .an% increased by 23 during the 8 2009*10!

Keposits increased by 26 over previous year and Advances increased by 21!

ross NPA brought down to 1!4:

Net NPA reduced to 0!67

Jey hihlihts

#I 10 per+ormance


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-artic)lars#I 200>@10 in 7!R mnG

#I 200@0> in 7!R mnG

Absol)te*rowth % *rowth Direction

"otal .usiness 1;1,712!9 147,927!3 42,773!6 24!;

Net Interest Income 2,;71!3 2,326!; 466!; 13!;

/ther Income 1,346!0 1,24:!7 197!2 1:!0

/perating Gxp 1,:67!6 1,496!4 2:4!2 17!9

/perating Pro(t 2,66;!9 2,2:;!2 290!; 12!7

Net Pro(t 1,62;!: 1,221!4 40:!4 26!1

#


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-artic)lars #I 200>@10 #I 200@0> Direction

#ost o Keposits ;!;4 ;!97

ield on Advances 14!03 14!3:

Mealthy


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-artic)larsK1 #I 11

in 7!R mnGK1 #I 10

in 7!R mnGAbsol)te*rowth % *rowth Direction

Keposits 10:,09:!6 74,;:;!2 22,429!4 2:!:

Advances ;2,09:!: 66,4::!6 1:,;40!1 40!2

"otal .usiness 1;7,194!1 149,144!; 49,069!3 27!1

#AA 21,:;2!3 16,243!0 :,347!3 32!4

ross NPA 943!3 107;!2 *162!7

Net NPA 479!2 ;97!6 *309!4ross NPA DE 1!40 1!9:

Net NPA DE 0!63 1!36


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-artic)larsK1 #I 11

in 7!R mnGK1 #I 10

in 7!R mnGAbsol)te*rowth % *rowth Direction

Net Interest Income 921!; 6:2!; 469!0 :4!7

/ther Income 421!2 269!3 :1!7 24!7

/perating Gxp 36:!9 439!: 10;!4 40!;

/perating Pro(t ;7:!1 3;2!6 414!: ::!3

Net Pro(t 334!; 416!3 127!4 30!;

H1 811 perormance A snapshot

#inancial -er+ormance ' K1 #I 11 ?s K1 #I 10

H1 8 2011 Net interest income increased by :3 over previous H1 8 2010

/perating Pro(t increased by :: DoE

Net Pro(t increased by 31 DoE rom


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#-. has reported strong growth in deposits and advances in the last ew years

trong deposit and advances growth

&teady increase in advances&teady increase in deposits

Advances has been growing steady at a #A

in 7!R mnG%

"hane

#G. #harges :90 697 16

"reasury Income 367 370 * 3!:

uit

in 7!R mnG % "hane

Interest on oans ;,667 :,664 16!4

Interest onInvestments 1,94; 1,323 4:!0

/ther Interest Income ;1 :; 6!9;

4otal e3penses >,599 ,088 1.>%

7nterest income break )p

Increasing emplo ee eOcienc


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Increasing employee eOciency

*rowth in b)siness per employee &teady rise in prot per employee

/ur employee eOciency has been going up continuously as reSected by the above parameters


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6! trategy

/ur our pronged strategy going orward


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Deposits

Achieve 40 growth in deposits

increase low cost deposits rom 20 at

present to 26 over 4 years

.road base retail depositors to ensure

stability

"o improve depositor base rom 0!7 mn

to 1!26 mnF 8ocus on cross selling o

products

Advances

5aintaining ocus in retail5G

sectors at around :6

#ontinuing the high yielding cash

credit component at around :0 o

advances

Achieve steady growth o 26

7ncome

#ontinued ocus on high yielding retail

5G credits

Improving ee income by way o exchange

commission on non unded business

Increase ee income rom cross selling o

insurance, mutual und products, /nline

hare trading money transers other

technology based services

E3penses

Improving sta) productivity to lower

man power cost

"ight vigil on miscellaneous

expenditure

5aintain cost income ratio at the

present level o 30 Dlowest in the

industryE

/ur strategy is to ocus on all these our aspects o ban%ing business to capitali>e on the growth opportunitiesgoing ahead

/ur our pronged strategy going orward=


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:!


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ine "he #hartered 8inancial Analyst

No 1 in #ustomer atisaction awarded by I.A


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No!1 in #ustomer atisaction awarded by I.A

"l)sters 5 ; 9

#ity -nion .an% 9:

"amilnad 5ercantile .an% 9:

?arur Lysya .an% 93

es .an% 94


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4hank Io)

city union bank investor presentation final 16.08.10

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