N Kamakodi, MD & CEO, City Union Bank.
| Photo Credit:
BIJOY GHOSH
Private sector lender City Union Bank has reported a net profit growth of 16 per cent year-on-year (y-o-y) at ₹332 crore in the third quarter ended December 2025 (Q3FY26). Profit grew on growth in advances and improvement in yield on advances. Asset quality also improved y-o-y with Gross NPA showing sequential decrease for the past 11 quarters, the company said.
Total income grew 17 per cent at ₹2,001 crore. Of this, the bank earned Net Interest Income of ₹752 cr for Q3 FY26 registering 28 per cent growth y-o-y.
Total advances increased 21 per cent for Q3 FY26 to ₹60,892 crore from ₹50,409 crore in Q3 FY25. The yield on advances for Q3 FY26 improved to 9.73 per cent compared to 9.66 per cent in Q2 FY26. MSME loans made up almost 39 per cent of the total loan book at ₹23,836 crore. Total deposits of the bank stood at ₹70,516 cr in Q3 FY26 compared to ₹58,271 cr in corresponding period last year registering 21 per cent growth.
After many quarters, we have achieved a growth of over 20 per cent in both deposits and advances. This coupled with many other levers such as improved yield on advances and term deposits repricing have all helped in profitability, N Kamakodi, MD and CEO, City Union Bank, told businessline. With regard to the demand and overall economic climate in the MSME sector, he said that situation has been good and also improving as evidenced by a decline in their Special Mention Accounts.
The Gross NPA per cent for Q3 FY26 was reduced to 2.17 per cent from 3.36 per cent in the corresponding quarter last year. Net NPA was decreased to 0.78 per cent in the current quarter from 1.42 per cent in Q3 FY25.
With his 15-year tenure ending in April 2026 and with regard to a new candidate for this position, Kamakodi said that the bank had already submitted the names of potential candidates to the RBI in the second week of December and is awaiting approval. “The matter is under consideration and we will share more information once the regulator gets back to us,” he said.
Net Interest Margin (NIM) saw a rise and exceeded the company’s own guidance, due to faster repricing of deposits and increase in Gold loan portfolio with fixed rate component. NIM is at 3.89 per cent for Q3FY26 compared to 3.58 per cent in Q3 FY25. Gold loan saw a y-o-y growth of 33 per cent and stood at ₹17,209 crore as of December 2025.
Published on February 2, 2026
