Macquarie brokerage firm initiated coverage on City Union Bank with an ‘outperform’ rating, stating that bank's earnings and target were 15 percent and 25 percent above consensus, respectively. Macquarie has set a price target of Rs 245 for the stock.

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The brokerage firm also expects the return on assets to touch 1.5 to 1.6 percent in the next couple of years. It states that bank's key strengths are its higher risk-adjusted margin and granular balance sheet.

City Union Bank outperformed the rest of the banking industry by more than 3 percent after the RBI kept the repo rate at 4 percent and the reverse repo rate at 3.35 percent unchanged.

According to a report in Moneycontrol, some of the key strengths of City Union Bank are rising net cash flow and cash from operations, increased profit margin leading to an increase in net profit quarter-on-quarter, increasing per quarter profits over the last three years, raising net cash in the last two years, and institutions and foreign institutional investors increasing their shareholdings among others.

(Edited by : Jomy)

First Published:Apr 7, 2021 5:09 PM IST