N Kamakodi, MD and CEO, City Union Bank | Photo credit:
Total income for the quarter stood at ₹1,912 crore, up 15 percent over the same quarter last year. Interest income of ₹1,653 crore witnessed a growth of 15 per cent.
Earnings growth was driven by increased lending, even as asset quality showed improvements. “Overall, it was a good quarter, both in terms of growth and asset quality. Our net NPAs have touched a 10-year low below the 1 percent mark this quarter,” said Kamakodi N, Managing Director and Chief Executive Officer of City Union Bank. business line.
Asset quality improved year-on-year as gross NPA stood at 2.42 percent in Q2FY26 compared to 3.54 percent in the same quarter last year. Net NPA stood at 0.90 percent, compared to 1.62 percent a year ago.
On SME stress, especially due to tariffs, Kamakodi said there are signs of stabilization. “In fact, Special Mention Accounts (SMA) delinquencies have declined sequentially from June to September 2025,” he said.
Fall into NIM
Net interest margin decreased marginally to 3.63 percent in the second quarter of 2026, compared to 3.67 percent in the same quarter last year. The faster repricing of deposits and migration of gold loans to fixed rates contributed to this improvement in NIM.
For the half-year ended September (H1FY26), the private sector bank’s PAT stood at ₹635 crore, compared to ₹550 crore for H1FY25. Total income grew 16 percent year-on-year to end at ₹3,761 crore.
Total advances rose 18 percent year-on-year to ₹57,561 crore in Q2FY26. With approximately 40 percent of total advances, lending to SMEs is the bank’s most important portfolio. Over the past six quarters, CUB has achieved double-digit loan growth. Within retail loans, gold loans grew strongly at 32 percent YoY.
The bank’s total deposits rose 21 percent year-on-year to ₹69,486 crore in Q2FY26. CASA also grew 15 per cent YoY to ₹19,536 crore.
The bank’s capital adequacy stood at 21.68 percent and Tier-1 capital adequacy at 20.71 percent as of September 2025, as per Reserve Bank of India (RBI) guidelines based on Basel III norms. This is well above the legal requirements.
On the hunt for new CEO
When asked about the updates in the hunt for the new CEO, Kamakodi said the bank will accept applications for the position until November 7. The process will then begin and a call will be made by the Board of Directors after applications have been considered and all eligible candidates have been met.
The Kumbakonam-headquartered private sector bank recently announced its intention to recruit for the position of Managing Director & CEO. The appointment will be on a three-year contract basis, subject to RBI approval.
Published on November 3, 2025
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