Investor Presentation – November 2010

Disclaimer

No representation or warranty, express or implied is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information contained in this presentation is only current as of its date. Certain statements made in this presentation may not be based on historical information or facts and may be “forward looking statements”, including those relating to the bank’s general business plan’s and strategy, its future financial condition and growth prospects and future developments in the industry and regulatory environment. Actual results may differ materially from these forward-looking statements due to a number of factors, including future changes or developments in the bank’s business, its competitive environment and political, economic, legal and social conditions in India.

This communication is for general information purpose only, without regard to specific objectives, financial situations and needs of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any shares in the bank and neither any part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. The bank may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revisions or changes. This presentation should not be copied and/or disseminated in any manner.

Table of contents

1.

City Union Bank – Overview & Growth Story 2.

Ownership Pattern 3.

Management 4.

Financial Performance 4-8 9-10 11-14 15-33

1. City Union Bank – Overview & Growth Story

4

Showcasing steady performance on an ongoing basis …

Long and consistent track record of profitability – Profit and dividend payout in all 100 + years of operations Steady growth – Business growing at a CAGR of 27% and Net Profit at a CAGR of 30% in last five years RoA and RoE at 2% and 27% respectively for Q2 2010-11, which is considered healthy in the banking space Best Corporate Practices; All Independent & Professional directors; Continuity in Management – only 6 CEOs so for Rapid progress on the technology front with 100% business under CBS and State of the Art Technology platform Significant improvement in asset quality over the years. Net NPA – 0.54% for Sep 2010 and PCR > 70% Well capitalized; CAR – Basel II – 13.41% as on September 30, 2010 Future plans for expansion of branch network to 500 Branches in next 3 years

CUB is well positioned to capitalize on the huge growth opportunities in the banking sector 5

Key milestones

our Bank

1965 1904

Incorporation of the Bank

1998

Initial Public Offering (IPO); Listing Bank’s shares on the BSE, NSE & MSE Amalgamation of ‘The City Forward Bank Limited’ and ‘The Union Bank Limited’ with

2003

Obtained licenses to act as a agent for procuring life insurance & general insurance business

1957

Take over of Common Wealth Bank Limited

1945

Scheduled bank since 22.03.1945

6

2009

Rights issue for equity shares @ 1 : 4 – to reward the existing shareholders

2007

Preferential allotment for equity shares strengthening bank’s capital adequacy ratio

2002

Entered into agreement with TCS for core banking solution “Quartz”

Strong presence in the South



A network of 229 branches of which 200 branches are located in South India and 146 in Tamil Nadu alone

7

State wise branches State

Tamil Nadu Andhra Pradesh Karnataka Maharashtra Kerala Gujarat Others

Total No of Branches

146 29 15 12 10 6 11

229 Statewise % of Branches

64 13 7 5 4 2 5

100 % of our Business

71 9 6 7 2 1 4

100

Branch Expansion



We have received License from Reserve Bank of India to open 62 more branches in various states within a Year, out of which 40 branches be in Tier I and Tier II centres and 22 branches in Tier III to VI centres.



Till 15 th November 2010, we have opened 7 branches in Tamil Nadu out of license received for 62 branches.



Remaining 55 branches yet to be opened.

State wise Branch Expansion planned State

Tamil Nadu Andhra Pradesh Karnataka Maharashtra Chattishgarh New Delhi Orissa Punjab Uttar Pradesh

Total Tier I & II centres

16 5 5 4 1 2 1 1 1

36 Tier III to VI centres

19

19

8

2. Ownership Pattern

9

A well diversified investor base

Ownership profile as on 30

Public 56.6% Others 0.4%

th September 2010

FII's 23.1% Domestic Institution 6.5% Corp. Bodies 13.4%

Major Institutional shareholders as on 30 th September 2010 Shareholders

LIC of India L & T Capital Holdings Limited F M O, Nederlands Argonaut Ventures Ares Investments Acacia Partners Lp.

GMO Emerging Illiquid Fund Karur Vysya Bank Wasatch Core Growth Fund ING Vysya Life Insurance Company

% holding

4.97

4.78

4.67

3.94

3.39

3.03

1.63

1.45

1.28

1.15

 Well diversified ownership  Long term investors ensuring stability and support to management  Cash management services offered to LIC to improve CASA and customer base  Bank Assurance partner to LIC and ranked No.1 in South India consecutively for three years  Chairman’s Group holding reduces to 9.42% 10

3. Management

11

Transparent ‘Corporate Governance’ practices

All directors are Independent and Professional directors Various sub-committees of Board functions to oversee the operations of the Bank Code of conduct for directors and senior management put in place Disclosure norms strictly adhered to KYC / AML norms strictly complied with. No penalties / fines for any violation.

12

A well experienced and strong Board (1/2)

We have eminent personalities on our Board;

 1 Former Chairman of a PSU Bank  2 Chartered Accountants  2 Agriculturists  1 Industrialist  1 Advocate  1 Retired High Court Judge  1 Banking professional

Profile of Board of Directors Name Profile

Mr. P.Vaidyanathan, Chairman He is a graduate in Commerce, a Fellow Member of the Institute of Chartered Accountants of India, Associate Member of the Institute of Cost & Works Accountants of India and Associate Member of the Institute of Company Secretaries of India. He has more than 35 years of experience in financial services industry Mr. S. Balasubramanian, MD & CEO He holds a Master degree in Mathematics, CAIIB and PGDFM and has 38 years of experience in the banking industry. He had joined City Union Bank in 1971 as a probationary officer and has since then been associated with the Bank in various capacities. In 2005 he was appointed as the Chairman & CEO of our Bank and thereafter, in 2009 the Reserve Bank of India has accorded approval for his appointment as the Managing Director and CEO of our Bank with effect from January 31, 2009 Mr. K.S. Raman, Director He is a post graduate in Statistics. He is an agriculturist and has been on the board during 1984 to 1992 and 1994 to 2002 and presently from 2004 onwards. He has worked with Statistics Department, Annamalai University, Automobile Products of India Limited and in Larsen & Toubro Ltd 13

A well experienced and strong Board (2/2)

Profile of Board of Directors Name

Mr. S. Bernard, Director Mr. N Kantha Kumar, Director Mr. N.Sankaran, Director

Profile

He is a graduate in Commerce and a Fellow Member of the Institute of Chartered Accountants of India. He is a practicing Chartered Accountant of 31 years standing with expertise in the field of Accountancy and Taxation He is a graduate in Commerce and Law. He has been in the Banking Industry for around 38 years. He has held key positions such as Executive Director in Canara Bank and Chairman & Managing Director in Syndicate Bank He is a Bachelor of Engineering (Civil) and is a Member of Institute of Engineers, India and has been on the board since 2008. He is a retired General Manager from M/s. Voltas International, Chennai Mr. R.G. Chandramogan, Director He is the Chairman & Managing Director of Hatsun Agro Product Limited. He has been in the dairy processing and Ice cream business for around 30 years. He visits the Indian Institute of Management, Ahmedabad as a guest faculty.

Mr. T.K. Ramkumar, Director He is a graduate in Commerce and an advocate. He is a partner in M/s. Ram & Rajan & Associates, and possesses knowledge and experience in banking law, company law, intellectual property rights, civil laws etc Justice (Retd.) S.R. Singaravelu, Director Mr. C.R. Muralidharan, Director He is a former Judge of High Court of Madras and High Court of Orissa. He has vast experience of 36 years in the Judiciary. He was in Judiciary Department and held various position.

He retired as a whole time member of the Insurance Regulatory and Development Authority (IRDA) in November 2009. Prior to this appointment he was a Chief General Manager in Reserve Bank of India. He has extensive experience in regulation of Banks in Reserve Bank of India and Insurance Companies in IRDA.

14

4. Financial Performance

15

FY10 performance – A snapshot

HIGHLIGHTS FOR THE QUARTER ENDED 30 th SEPTEMBER 2010

 Deposits increased by 28.7% to Rs.114,941 Mn from Rs.89,332 Mn  Advances surged by 38.5% from 58,058 Mn to 80,393 Mn  Total Business grew by 32.5% from Rs.147,390 Mn to Rs.195,334 Mn  CASA improved by 26.7% to Rs.22,600 Mn from Rs.17,843 Mn  Highest Quarterly Profit in the Bank’s history  Net Profit increased by 35% from Rs.458 Mn to Rs.616 Mn  Net NPA lowered to 0.54% from 1.16% (YoY)  Highest ROA at 1.98% up from 1.86% (YoY)  Net Interest Margin higher at 3.74% from 2.79% (YoY).

16

30

th

September 2010 performance – A snapshot

Financial Performance – 30 th September 2010 Vs 30 th September 2009 Particulars SEP 2010 ( in INR mn) SEP 2009 ( in INR mn) Absolute Growth

Deposits Advances 114,941 80,393 89,332 58,058 25,609 22,335 Total Business Demand Deposit Savings Deposit CASA Gross NPA Net NPA Gross NPA (%) Net NPA (%) CRAR – Basel II CD Ratio P C R 195,334 9,727 12,873 22,600 1,011 428 1.26% 0.54% 13.41% 69.94% 72.44% 147,390 8,268 9,575 17,843 1,154 666 1.99% 1.16% 14.08% 64.99% 53.51% 47,944 1,459 3.298

4,757 -143 -238

% Growth

28.7% 38.5% 32.5% 17.6% 34.4% 26.7%

Direction MAR 2010 (in INR mn)

102,846 68,967 171,813 10,970 11,512 22,482 935 397 1.36% 0.58% 13.46% 67.06% 71.56% 17

Q2 FY11 performance – A snapshot

Financial Performance – Q2 FY 11 Vs Q2 FY 10 Particulars Q2 FY 11 ( in INR mn)

Net Interest Income Other Income Operating Expenses Operating Profit Net Profit R O A R O E 1,040 439 529 950 616 1.98% 27.31%

Q2 FY 10 ( in INR mn)

591 493 444 641 458 1.86% 25.58%

Key highlights

 NII increased by 76%  Operating Profit increased by 48% (YoY)  Net Profit grew by 35%  ROA at 1.98% and ROE at 27.31% highest in the Banking Industry.

Absolute Growth

449 -54 85 309 158

% Growth

75.9% -10.9% 19.2% 48.3% 34.6%

Direction

18

H1 FY11 performance – A snapshot

Financial Performance – H1 FY 11 Vs H1 FY 10 Particulars H1 FY 11 ( in INR mn)

Net Interest Income Other Income Operating Expenses Operating Profit Net Profit R O A R O E 1,962 761 986 1,736 1,060 1.75% 24.09%

Key highlights

 NII increased by 70%  Operating Profit increased by 56%  Net Profit increased by 37%  Healthy ROA at 1.75% and ROE high at 24.09%

H1 FY 10 ( in INR mn)

1,154 753 793 1,113 773 1.60% 22.10%

Absolute Growth

808 8 193 623 287

% Growth

70.0% 1.1% 24.3% 56.0% 37.1%

Direction

19

Key business indicators

Key indicators Particulars

Cost of Deposits Yield on Advances Yield on Investments Net Interest Margin Cost to Income Operating Exp - as a % of NII Return on Assets (ROA) Return on Net worth (RONW) Per Employee Business ( in INR mn) Per Employee Profit (in INR mn) Ann EPS (in INR.) – FV INR1/- Share

Q2 FY 2010-11

6.84% 12.51% 6.65% 3.74% 35.77% 50.87% 1.98% 27.31% 72.56

0.92

1.54

H1 FY 2010-11

6.83% 12.44% 6.60% 3.64% 36.22% 50.25% 1.75% 24.09% 72.56

0.79

2.65

Direction FY 2009-10

7.73% 13.04% 7.84% 3.15% 39.33% 59.63% 1.52% 20.55% 65.10

0.58

4.03

20

Strong deposit and advances growth

Steady increase in deposits

25 20 15 10 5 0

Deposits (INR bn)

120 100 80 60 40 35 47 64 82 20 0 Mar-06 Mar-07 Mar-08

Steady increase in CASA

Mar-09

CASA (INR bn)

8 11 13 16 Mar-06 Mar-07 Mar-08 Mar-09 103 Mar-10 Sep-10 22 Mar-10 115 23 Sep-10

Steady increase in advances Advances (INR bn)

90 75 60 45 30 15 0 25 Mar-06 33 Mar-07 45 Mar-08 CUB has reported strong growth in deposits and advances in the last few years 21 56 Mar-09 68 80 Mar-10 Sep-10  Deposits - stable and retail oriented. Growing at a CAGR of 30%  CASA recorded 27% growth for Sep 2010 (YoY)  Advances growing at a CAGR of 29% in the last 5 years; Credit Deposit ratio is sound at 69%

Strong growth in income and profitability

Strong growth in other income Other Income (INR Mn)

1,500 1,435 1,237 1,200 903 900 600 600 444 300 Mar-06 Mar-07 Mar-08 Mar-09

Steady increase in net interest income Net Interest Income (INR Mn)

Mar-10 2,800 2,500 2,200 1,900 1,600 1,300 1,000 1,398 1,675 1,998 2,426 2,781 Mar-06 Mar-07 Mar-08 Mar-09

Half year figures (Not Annualised)

Mar-10 761 Sep-10

CEB & Charges Income over 5 years CEB Income (INR Mn)

700 600 500 400 300 200 100 273 357 Mar-06 Mar-07

Robust PAT growth

480 Mar-08 598 Mar-09

PAT (INR Mn)

1,962 Sep-10 22 1,500 1,200 900 600 300 0 564 Mar-06 718 Mar-07 1,017 Mar-08 1,221 Mar-09 690 Mar-10 1,528 Mar-10 455 Sep-10 1,060 Sep-10

Cost of deposits & yield on advances

Cost of deposits and yield on advances in last 10 years

CoD YoA 16.0

15.06

14.0

12.0

13.75

12.58

11.72

11.36

11.00

10.85

11.32

12.82

13.46

13.04

12.44

10.0

9.86

8.96

8.74

8.0

7.89

6.96

7.23

7.98

7.73

6.83

6.0

6.08

5.75

5.95

4.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Sep-10 Spread between cost of deposits and yield on advances of our bank maintained in the last 10 years 23

Investments – At a Glance

Investments Breakup and Category wise Particulars (Rs in Mn)

SLR Non SLR Total Investments Yield on Investments Investments Breakup: - A F S - H T M - H F T Total Investments M D – AFS M D – HTM M D – HFT M D – Overall

SEP-10

28,819 6,575 35,394 6.6% 4,954 30,389 51 35,394 2.86

5.81

6.46

5.31

MAR-10

25,788 6,397 32,185 6.5% 3,928 28,256 0 32,184 2.89

5.98

5.49

SEP-09

25,661 4,257 29,918 6.4% 5,914 23,959 46 29,919 2.09

6.23

7.15

5.30

 In total Non-SLR securities of Rs.6,575 Mns, investment in NABARD RIDF constitutes Rs.5,924 Mns.  Modified Duration for entire investment portfolio is 5.31 only.

24

Loan book – Major Industry wise exposure

Advances to Major Industries as on 30 th September 2010 Loans Composition

Construction (Comm Real Estate)

Amount (in INR mn)

3,561

% to Total Advances

4% Paper & Paper Products, 2% I ron & Steel, 5% Textiles 8,426 11% Food Processing Iron & Steel Paper & Paper products Other Metal & Metal Products Other Industries 1,390 3,760 1,798 1,332 2,480 2% 5% 2% 2% 3% Food Processing, 2% Textiles, 11% Other Metals, 2% Other I ndustries, 3% Construction, 4% 25

Loan book – Major Sector wise Exposure & Regulatory Classification

Major Sector wise Advances as on 30 th September, 2010 Major Sector Amount ( in INR mn) % to Total Adv

 SME and trade loans earning higher yields constitute 54%. M S M E 25,912 32%  Diversified credit portfolio reduces credit risk Agriculture 9,401 12% Large Industries Retail Traders 4,679 8,043 6% 10%  Lower ticket size backed by adequate collaterals  Unsecured Advances aggregate to 3% only Wholesale Traders 9,487 12%

Regulatory Classification of Advances as on 30 th September, 2010 Classification Amount ( in INR mn) % to Total Adv

Corporates Regulatory Retail NBFC Other Advances

Gross Loans Total

27,287 33,656 2,411 17,039

80,393

34% 42% 3% 21% 26

Loan book products composition

Loan Products composition as September 30, 2010 Loan Products Combination

OD/CC and Demand Loans Term loans Bills Purchased / Discounted

Gross Loans Total Amount ( in INR mn) % to Total Adv

46,263 58% 32,489 1,641

80,393

40% 2% Bills purchased/di scounted 2% Demand loans 23% Overdraft/Ca sh credit 34% Term loans 41% 27  Working capital loans yielding higher interest constitute 58% of advances  Re-pricing possible at short intervals thus reducing interest rate risk  ~80% of our loan book is on floating rate basis which reduces interest rate risk

Asset quality is showing continuous improvement

Gross NPA & Net NPA - Quantum

60 40 20 0 140 120 100 80 Gross NPA Net NPA 130.69

67.79

2005 130.69

67.79

112.83

49.80

2006 112.83

49.80

87.07

36.25

2007 87.07

36.25

2008 82.93

44.46

Gross NPA

NPA – AN ANALYSIS – LAST 5 YEARS

82.93

44.46

102.08

61.11

2009 102.08

61.11

Net NPA 93.50

39.67

2010 93.50

39.67

101.11

42.79

Sep-10 101.11

42.79

Gross NPA & Net NPA - %

7.00% 6.00% 5.89% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% Gross NPA % Net NPA % 4.32% 2005 5.89% 3.37% 3.37% 2.58% 2006 4.32% 1.95% 1.95% 2007 2.58% 1.09% 1.09% 2008 1.81% 0.98% 1.81% 0.98% 2009 1.80% 1.08% 1.80% 1.08% 2010 1.36% 0.58% 1.36% 0.58% 1.26% 0.54% Sep-10 1.26% 0.54% Gross NPA % Net NPA %  Smart improvement in Asset quality over the years; Gross NPA has come down from 5.9% in March’ 05 to 1.3% in September ’10  Net NPA level brought down to 0.5% in September ’10 from 3.4% in March’ 05  We have a well defined and robust credit appraisal policy and risk management system 28

Restructured Accounts

Details of Restructured Accounts

 No accounts Restructured in the last 5 quarters.  25% of the Restructured amounts already recovered (full cash recovery).  Only 2.9% of restructured accounts turned NPA and no addition from Restructured accounts in the last 5 quarters.

 The Restructured accounts are performing well and certain accounts got closed well before the due date. Out of Rs.4843 Mn in Restructured amounts, the amount collected upto September 2010 was Rs.1921 Mn.

 Regular repayments received for more than one year in accounts with restructured balance of Rs.1640 Mn.

 An amount of Rs.1697 Mn only in the Moratorium period of one year in entire Restructured Accounts.  Balance outstanding on Restructured Accounts as on 30th September 2010 – Rs.3337 Mns 29

Restructured Accounts

Details of Restructured Accounts

Restructured in I Phase – FY 2008-09 Restructured in II Phase – FY 2009-10

Total

Out of the above, Accounts closed till 30.09.2010

Accounts turned as NPA Amounts repaid till 30.09.2010

Balance outstanding as at 30.09.2010

No .of Borrowers

213 51

264 Amount ( in INR mn)

3,187.9

1,655.6

4,843.5

699.5

142.5

1221.9

3337.0

 Out of Rs.3337 Mn, accounts corresponding to Rs.1640 Mn have completed 1 year of principal repayment after the moratorium period.  Rs.1232 Mn have completed more than 6 to 12 months of principal repayment after the moratorium period.  Rs.401 Mn have completed 6 months of principal repayment after the moratorium period.  Only Rs.64 Mn yet to start principal repayment. 30

Income and Expenses break up – Q2 FY 11 Vs Q2 FY 10

Particulars

CEB & Charges Treasury Income Others including Suit Recoveries

Total Other Income Particulars

Interest on Loans Interest on Investments Other Interest Income

Total expenses Other income break up

2,292 603 26

2,921 Q2 FY 11 Q2 FY 10 % Change March’ 10

244 24 172

440

148 287 59

494 Interest income break up Q2 FY 11

64.9% Ve 291.5%

- ve Q2 FY 10 % Change March’ 10

1,853 495 8

2,356 Particulars

690 458 260

1,435

Interest expended Employee cost Other operating exp

Total expenses

1,881 247 282

2,410

1,765 224 220

2,209 (in INR Mn)

23.7% 21.8% 325.0%

24.0%

7,558 1,937 71

9,566 Expenses break up Q2 FY 11 Q2 FY 10 % Change March ’10

6.6% 10.3% 28.2%

9.1%

6,785 801 857

8,443

31

Income and Expenses break up – H1 FY 11 Vs H1 FY 10

Particulars Interest income break up H1 FY 11 H1 FY 10 % Change March’ 10 (in INR Mn) Particulars

CEB & Charges Treasury Income Others including Suit Recoveries

Total Other Income

Interest on Loans Interest on Investments Other Interest Income

Total expenses Other income break up

4,407 1,143 44

5,594

3,694 19.3% 7,558 917 24.6% 1,937 28

4,639 Particulars

57.1%

20.6%

71

9,566 Expenses break up H1 FY 11 H1 FY 10 % Change March ’10 H1 FY 11 H1 FY 10 % Change March’ 10

455 79 227

761

280 370 103

753

162.5% Ve 220.4%

- ve

690 458 260

1,435

Interest expended Employee cost Other operating exp

Total expenses

3,632 478 508

4,618

3,486 405 388

4,279

4.2% 18.0% 30.9%

7.9%

6,785 801 857

8,443

32

Increasing employee efficiency

Growth in business per employee Business Per Employee (INR Mn)

80 70 60 50 40 30 20 34.0

Mar-06 35.0

49.9

56.5

65.1

72.6

Mar-07 Mar-08 Mar-09 Mar-10 Sep-10

Steady rise in profit per employee Profit per Employee (INR Mn)

0.8

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0.4

Mar-06 0.4

0.5

0.5

0.6

Mar-07 Mar-08 Mar-09 Mar-10 Sep-10

Annualised

Our employee efficiency has been going up continuously as reflected by the above parameters 33

Thank You