Why Brokerages are Recommending City Union Bank

  • 2 months ago
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By Aditya Raghunath

Investing.com — City Union Bank Ltd (NS:) is getting a lot of brokerages’ heads to turn. This small-sized bank is on the radar of quite a few investment firms who think its stock price has significant upside.

Sharekhan says in its research report that the management indicated an improvement in collection efficiency and that it is near-normal levels now. City Union is adequately capitalized and that it has been increasing its focus on retail sales. Sharekhan also said, “The bank is well placed on the asset-quality front, with a manageable level of restructuring and adequate provision cover.” It is very positive on the bank and has a price target of Rs 225, up 26% from current levels.

ICICI Direct (NS:) is a little more cautious on the bank. The company says that it expects City Union Bank to pick up pace in the second half of FY22 as the ‘tide turns toward normalcy’.  ICICI Direct emphasized, “Sequentially, asset quality has improved but the quantum of loans that would be coming up for restructuring and slippages number in coming quarter would be key to monitor.” It has a lower target on the stock price: Rs 200.

Edelweiss Financial Services Ltd. (NS:) has a price target of Rs 245 for City Union Bank, an upside of over 37%. Edelweiss says City Union is one of the fastest-growing small-sized banks and has very good operating metrics.

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