Investor Presentation – August 2010

1. Investor Presentation – August 2010

2. 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.

3. Table of contents

4. 1. City Union Bank – Overview & Growth Story

5. 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 1.5% and 20.5% respectively, 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 – 0.58% and Provision Coverage Ratio > 70% Well capitalized; CAR – Basel II – 13.46% as on March 31, 2010 Future plans for expansion of branch network to 500 Branches in next 3 years Rated as No.1 by Chartered Financial Analyst Magazine CUB is well positioned to capitalize on the huge growth opportunities in the banking sector

6. Key milestones 2003 Obtained licenses to act as a agent for procuring life insurance & general insurance business 1998 2009 Initial Public Offering (IPO); Listing Bank’s shares on the BSE, NSE & MSE Rights issue for equity shares @ 1 : 4 – to reward the existing shareholders 1965 2007 Amalgamation of ‘The City Forward Bank Limited’ and ‘The Union Bank Limited’ with our Bank Preferential allotment for equity shares strengthening bank’s capital adequacy ratio 1904 2002 Entered into agreement with TCS for core banking solution “Quartz” Incorporation of the Bank 1957 Take over of Common Wealth Bank Limited 1945 Scheduled bank since 22.03.1945

7. Strong presence in the South • A network of 222 branches of which 193 branches are located in South India and 139 in Tamil Nadu alone State wise branches

8. 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 are in Tier I and Tier II centres and 22 More branches planned to open under Tier III to VI centres. State wise Branch Expansion planned

9. Providing a wide array of services (1/2) Services & facilities – Domestic banking • Implementation of core banking at all the branches enabling customers to operate their accounts from any of the branches • 168 own inter connected ATMs nationwide as on August 15, 2010; Access to ATMs through Cashtree, NFS, VISA tie-ups • VISA debit card access worldwide • RTGS and NEFT available at all branches • Internet and mobile banking facility • SMS alert facility • Utility bill payments – Telephone, electricity, credit card payments etc • E-Tax payment facility • E- payment of college term fees, mess fee & examination fees for university students • Demat services in tie-up with NSDL

10. Providing a wide array of services (2/2) Services & facilities - International banking • Forex services to the importers & exporters • Trade credit facility to importers • Handling overseas direct investments and foreign direct investments • International banking operations / cross border banking through correspondent banking relationships with HSBC Bank, Wachovia Bank, Standard Chartered Bank, Commerce Bank & others • Forex dealing services through forward contracts, etc. • Tie up with Doha Bank for arrangement of money transfer • Drawing arrangement from Singapore with Bank of India • Money 2 India Service – Tie up with ICICI Bank for fund transfer • Arrangement with UAE Exchange and Majan exchange for money transfer

11. Offering the best of both worlds and more Old private sector banks New private sector banks • Flexibility to enter adjacent markets and businesses • Diversified product portfolio • High operating expenses • High % of fee income • Perception of Poor asset quality • High proportion of retail deposits – low CASA • Relative size of asset base • High cost of funds • Strong growth • Asset quality • High ROA • Technology savvy • Operating efficiencies • Large branch network • Strong customer base • Focused approach towards SME’s • Plans to open branches in Tier II and Tier III cities • Experienced management team

12. 2. Ownership Pattern

13. A well diversified investor base Major shareholders as on 30th June 2010 Ownership profile as on 30th June 2010 • Well diversified ownership • Long term investors adding credibility 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

14. Rights Issue – FY 2009-10 During the year 2009-10, we have issued 80 mn equity shares with a face value of Re.1/- each (“Rights Equity shares”) for cash at a price of Rs.6/- including a premium of Rs.5/- aggregating to Rs.48 crores to the existing equity shareholders of our Bank on rights basis in the ratio of 1 Rights Equity share for every 4 Equity shares held. The total proceeds through rights issue was around Rs.480 mn. Capital increases from Rs.320 mn to Rs.400 mn.

15. 3. Management

16. Transparent ‘Corporate Governance’ practices All directors are Independent and Professional directors Various sub-committees of Board have been formed to oversee the operations of the Bank Code of conduct for directors and senior management has been put in place Disclosure norms are strictly adhered to

17. A well experienced and strong Board (1/2) We have eminent personalities on our Board; • 1 Former Chairman of a PSU Bank • 3 Chartered Accountants • 2 Agriculturists • 1 Industrialist • 1 Advocate • 1 Chief Comm. Of Income Tax (Retd.) • 1 Retd. High Court Judge • 1 Banking professional Profile of Board of Directors

18. A well experienced and strong Board (2/2) Profile of Board of Directors

19. 4. Financial Performance

20. FY10 performance – A snapshot FY 10 performance Key highlights • Total Business of the Bank increased by 24% during the FY 2009-10. • Deposits increased by 25% over previous year and Advances increased by 21%. • Gross NPA brought down to 1.36% • Net NPA reduced to 0.58%

21. FY10 performance – A snapshot FY 10 performance Key highlights • Total business of the Bank grew by ~24% in FY10 • Net interest income increased by 15% and PAT increased by 25% • Net Profit increased by 25% from Rs.1221.3 Mn to Rs.1527.6 Mn • Provision Coverage Ratio achieved well in advance. • High CRAR offers scope for more leverage • High Tier I Capital offers huge scope for increasing Tier II Bonds

22. Key business indicators Key indicators Key highlights • Healthy RONW at 20.5% in FY10 up from 18.5% in FY09 • Cost of Deposits decreased from 7.98% in FY09 to 7.73% in FY10 • ROA increased marginally from 1.50% in FY09 to 1.52% in FY10

23. Q1 FY11 performance – A snapshot Financial Performance – Q1 FY 11 Vs Q1 FY 10 Key highlights • Total Business increased by 28.1% from Rs.139133.7 Mn to Rs.178193.1 Mn • CASA position grew by 42.3% to Rs.21672.4 Mn from Rs.15234.0 Mn • Net NPA brought down to 0.54% from 1.45% last year • ROA increased to 1.52% from 1.32%

24. Q1 FY11 performance – A snapshot Financial Performance – Q1 FY 11 Vs Q1 FY 10 Key highlights • Q1 FY 2011 Net interest income increased by 64% over previous Q1 FY 2010 • Operating Profit increased by 66% (YoY) • Net Profit increased by 41% (YoY) from Rs.315.4 mn to Rs.443.7 mn

25. Strong deposit and advances growth Steady increase in deposits Steady increase in advances CAGR – 30% CAGR – 27% Steady increase in CASA • Advances has been growing steady at a CAGR of 27% in the last 5 years; Credit Deposit ratio is sound at 67% • Deposits is retail oriented. Stable and growing at a CAGR of 30% • CASA grew by 44.94% in FY 2010 at a CAGR of 27%. CAGR – 27% CUB has reported strong growth in deposits and advances in the last few years

26. Strong growth in income and profitability Strong growth in other income CEB & Charges Income over 5 years CAGR: 26% CAGR: 34% Steady increase in net interest income Robust PAT growth CAGR: 27% CAGR: 19%

27. Cost of deposits & yield on advances Cost of deposits and yield on advances in last 10 years Spread between cost of deposits and yield on advances of our bank maintained in the last 10 years

28. Investments – At a Glance Investments Breakup and Category wise • In total Non-SLR securities of Rs.6510.6 Mns, investment in NABARD RIDF constitutes Rs.5782.6 Mns. • Modified Duration for entire investment portfolio is 5.48 only.

29. Loan book – Major Industry wise exposure Advances to Major Industries as on 30th June 2010

30. Loan book – Major Sector wise Exposure & Regulatory Classification Major Sector wise Advances as on 30th June, 2010 • SME and retail trade loans earning higher yields. • Diversified credit portfolio reduces credit risk • Lower ticket size backed by adequate collaterals • Unsecured Advances around 3% only Regulatory Classification of Advances as on 30th June, 2010

31. Loan book products composition Loan Products composition as June 30, 2010 • Working capital loans yielding higher interest constitute 60% 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

32. Asset quality is showing continuous improvement NPA – AN ANALYSIS – LAST 5 YEARS Gross NPA & Net NPA - % Gross NPA & Net NPA - Quantum • Asset quality has shown continuous improvement over the years; Gross NPA has come down from 5.9% in March’ 05 to 1.4% in March’ 10 • Net NPA levels has come down from 3.4% in March’ 05 to 0.6% in March ’10 • NPA levels has come down despite the fact that we continue to focus on SME’s and retail trade loans. • We have a well defined and robust credit appraisal policy and risk management system

33. Restructured Accounts Details of Restructured Accounts • The Restructured accounts are performing well and certain accounts got closed well before the due date. • Around 18% of amount repaid in restructuring accounts. • Around 3.7% of restructured accounts turned NPA. • We have not restructured any account during the first quarter of 2010-11. • Accounts turned as NPA during the first quarter of 2010-11 was NIL. • Balance outstanding on Restructured Accounts as on 30th June 2010 – Rs.3474.6 Mns

34. Income and Expenses break up Interest income break up Other income break up Expenses break up

35. Increasing employee efficiency Growth in business per employee Steady rise in profit per employee Our employee efficiency has been going up continuously as reflected by the above parameters

36. 5. Strategy

37. Our four pronged strategy going forward… • Deposits • Achieve 30% growth in deposits & increase low cost deposits from 20% at present to 25% over 3 years • Broad base retail depositors to ensure stability • To improve depositor base from 0.8 mn to 1.25 mn; Focus on cross selling of products • Advances • Maintaining focus in retail/SME sectors at around 65% • Continuing the high yielding cash credit component at around 60% of advances • Achieve steady growth of 25% • Income • Continued focus on high yielding retail & SME credits • Improving fee income by way of exchange & commission on non funded business • Increase fee income from cross selling of insurance, mutual fund products, Online Share trading money transfers & other technology based services • Expenses • Improving staff productivity to lower man power cost • Tight vigil on miscellaneous expenditure • Maintain cost income ratio at the present level of 40% (lowest in the industry) Our strategy is to focus on all these four aspects of banking business to capitalize on the growth opportunities going ahead

38. 6. Recognitions

39. Ranking by Magazine – “The Chartered Financial Analyst”

40. No.1 in Customer Satisfaction awarded by IBA Indian Banks’ Association awarded City Union Bank as No.1 in Customer Satisfaction Study for IBA 2008 conducted by GALLUP consulting. Rank of Banks – Index – Bank within Clusters

41. Thank You