Shares of City Union Bank slumped over 5% on Wednesday's early after Reserve Bank of India (RBI) found divergence in additional gross non-performing assets (GNPA) for FY22 amounting to 259 crore rupees.
The divergence consists of 13 borrower accounts for an amount of 230 crore rupees, and 218 borrowers for an amount of 29 crore rupees.
According to the bank's exchange filing from Tuesday, RBI carried out site inspection for supervisory evaluation for FY22, from October 7 to November 18, and the final meeting concluded on December 19.
In its analysis, ICICI Direct Research stated that it does not anticipate much of an impact on profitability.
"The bank has already closed around 13 crore accounts while nearly 70 crore rupees has already been classified as non-performing assets (NPA) or has been closed. The balance amount, the bank has to classify as an NPA and make the provisions accordingly," the brokerage said.
On the technical front, today, the stock hit a intra-day low of nearly 9%, and the weekly average delivery volume is 32.58%.
Further, in today's trading session the stock was trading at high day volume of 14.9 million.
"The stock is witnessing volatile moves with huge volume in today's session, it is down around 5% but has also recovered more than 4 % from morning lows. Considering the volatility one should avoid fresh positions , existing longs as well can be exited on bounce, support is at 166 whereas 187 is resistance," said Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One.
According to Mintgenie poll, 21 analysts recommend 'buy' rating on the stock.
