India's City Union Bank tumbles after RBI finds divergence in bad loans

City Union Bank

21/12/2022 06:12

(Updates with analyst comments, levels)
    ** Private lender City Union Bank's shares  CTBK.NS  drop as
much as 8.9% to 172 rupees, their biggest intraday pct fall
since August 2020
    ** Stock hits lowest since Oct 7
    ** The Reserve Bank of India found divergence in the bank's
gross bad loans amounting to 2.59 bln rupees ($31.32 mln) after
an on-site inspection, CTBK said late Tuesday
    ** The lender says adjusted profit after taking the
divergence into account is 7.19 bln rupees, vs 7.6 bln rupees
reported earlier
    ** Investec analysts say divergence calls the bank's sound
underwriting culture into question, but believe lender is past
difficult phase in terms of stress recognition
        ** A bigger risk for the stock is the pending RBI
decision regarding reappointment of CEO N Kamakodi in April 23 -
Investec
  
    ** About 13 mln shares change hands by 10:57 a.m. IST, 4x
the 30-day avg of 3.4 mln shares
    ** Stock up ~40% YTD, as of last close
($1 = 82.6975 Indian rupees)
 (Reporting by Hritam Mukherjee in Bengaluru)
 ((Hritam.Mukherjee@thomsonreuters.com; +91 9830427878))