City Union Bank shares plunge 9% on NPA divergence

Shares of City Union Bank tumbled 9 per cent in Wednesday's trade after the private sector bank told stock exchanges that the RBI has found divergence in the additional non-performing asset (NPA) to the tune of Rs 259 crore, consisting of 13 borrower accounts for an amount of Rs 230 crore and 218 borrowers for an amount of Rs 29 crore for FY22.

In a filing to BSE, City Union Bank said the central bank conducted the on-site Inspection for Supervisory Evaluation (ISE) for FY22 from October 7 to November 18 and the final meeting concluded on December 19.

Following the development, the scrip fell 8.94 per cent to hit a low of Rs 172 on BSE. Despite Wednesday's losses, the scrip is up 43 per cent in the last six months.

'As per its final report on Risk Assessment it has inter-alia reported divergence in additional gross NPA for the said financial year amounting to Rs 259 crore, in accordance with the circulars cited above," the bank said.

The divergence to the tune of Rs 259 crore consisted of 13 borrower accounts for an amount of Rs 230 crore and 218 borrowers for an amount of Rs 29 crore, the bank said.

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Out of the above accounts, four accounts for Rs 60.41 crore and one account with the balance of Rs 0.36 crore, totalling to Rs 61 crore were already classified as NPA by the bank during H1FY23. Two accounts for Rs 4.07 crore and 55 accounts for Rs 9 crore totalling to Rs.13 crs were stands closed as on date, the bank said.

City Union Bank  offers personal banking services, with a wide range of products and services such as saving accounts, deposit scheme, home loans, education loans and debit cards. It is also engaged in NRI banking, under which it offer products and services such as deposits, remittance and PAN assistance and lockers services.