City Union Bank Investor Presentation Final 16.08.10

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Investor Presentation – August 2010

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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.

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Table of contents 1. City Union Bank – Overview & Growth Story 4-11 2. Ownership Pattern 12-14 3. Management 15-18 4. Financial Performance 19-32 5. Strategy 36-37 6. Recognitions 38-40

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4 1. City Union Bank – Overview & Growth Story

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5 Showcasing steady performance on an ongoing basis … RoA and RoE at 1.5% and 20.5% respectively, which is considered healthy in the banking space Rated as No.1 by Chartered Financial Analyst Magazine Steady growth – Business growing at a CAGR of 27% and Net Profit at a CAGR of 30% in last five years Significant improvement in asset quality over the years. Net NPA – 0.58% and Provision Coverage Ratio > 70% Future plans for expansion of branch network to 500 Branches in next 3 years Rapid progress on the technology front with 100% business under CBS and State of the Art Technology platform CUB is well positioned to capitalize on the huge growth opportunities in the banking sector Well capitalized; CAR – Basel II – 13.46% as on March 31, 2010 Long and consistent track record of profitability – Profit and dividend payout in all 100 + years of operations Best Corporate Practices; All Independent & Professional directors; Continuity in Management – only 6 CEOs so for

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

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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 No of Branches Statewise % of Branches % of our Business Tamil Nadu 139 63 73 Andhra Pradesh 29 13 9 Karnataka 15 7 6 Maharashtra 12 5 6 Kerala 10 5 2 Gujarat 6 3 1 Others 11 5 3 Total 222 100 100 State wise branches

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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 Tier I & II centres Tier III to VI centres Tamil Nadu 20 22 Andhra Pradesh 5 Karnataka 5 Maharashtra 4 Chattishgarh 1 New Delhi 2 Orissa 1 Punjab 1 Uttar Pradesh 1 Total 40 22 State wise Branch Expansion planned

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9 Providing a wide array of services (1/2) 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 Services & facilities – Domestic banking

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10 Providing a wide array of services (2/2) 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 Services & facilities - International banking

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

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12 2. Ownership Pattern

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13 A well diversified investor base Ownership profile as on 30 th June 2010 Shareholders % holding L & T Capital Holdings 4.79 LIC of India 4.68 Nederlandse Financierings 4.68 Ares Investments 3.90 Integrated Enterprises (I) Ltd. 3.90 Argonaut Ventures 3.66 Acacia Partners Lp. 3.04 Alpha Systems Pvt Ltd 2.59 GMO Emerging Illiquid Fund 1.75 Karur Vysya Bank 1.51 Major shareholders as on 30 th 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

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14 Rights Issue – FY 2009-10 The total proceeds through rights issue was around Rs.480 mn. 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. Capital increases from Rs.320 mn to Rs.400 mn.

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15 3. Management

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

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17 A well experienced and strong Board (1/2) 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. V.Jayaraman, Director A Post Graduate in Statistics and an agriculturist he has been on the board since 2002. He joined the Indian Revenue Service in July 1963 and held various posts in the Income Tax Department. He was on deputation to the Ministry of Home Affairs, New Delhi. He was the Chairman of Banking Service Recruitment Board, Southern Region as well as an Insurance Ombudsman, Southern Region 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 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

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18 A well experienced and strong Board (2/2) Name Profile Mr. S. Bernard, Director 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 Mr. N Kantha Kumar, Director 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 Mr. N.Sankaran, Director 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. M Naganathan, Director He is a graduate in Commerce and a Fellow Member of Institute of Chartered Accountants of India. He has been on the board since 2008 and is a senior partner in M/s. Price Patt & Co., Chartered Accountants, 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 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. Mr. C.R. Muralidharan, Director 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. Profile of Board of Directors

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19 4. Financial Performance

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20 Particulars FY 2009-10 (in INR mn) FY 2008-09 ( in INR mn) Absolute Growth % Growth Direction Deposits 102,845.9 82,066.2 20,779.7 25.3% Advances 68,967.1 56,862.2 12,104.9 21.3% Total Business 171,812.9 138,928.4 32,884.5 23.6% Gross NPA – Qtm 935.0 1020.8 -85.8 Net NPA – Qtm 396.7 611.1 -214.4 Gross NPA 1.36% 1.80% Net NPA 0.58% 1.08% FY10 performance – A snapshot 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% Key highlights FY 10 performance

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21 Particulars FY 2009-10 ( in INR mn) FY 2008-09 ( in INR mn) Absolute Growth % Growth Direction Total Business 171,812.9 138,928.4 32,884.5 23.7% Net Interest Income 2,781.4 2,425.7 355.7 14.7% Other Income 1,435.0 1,236.8 198.2 16.0% Operating Exp 1,658.5 1,395.3 263.2 18.9% Operating Profit 2,557.9 2,267.2 290.7 12.8% Net Profit 1,527.6 1,221.3 306.3 25.1% CRAR – Basel II 13.46% 12.69% - - Core CRAR – Tier I 12.41% 11.48% - - Provision Coverage Ratio 70.27% 53.23% - - FY10 performance – A snapshot FY 10 performance 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 Key highlights

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22 Particulars FY 2009-10 FY 2008-09 Direction Cost of Deposits 7.73% 7.98% Yield on Advances 13.04% 13.46% Return on Investments 7.84% 8.58% Net Interest Margin 3.15% 3.49% Cost to Income 39.33% 38.10% Operating Exp - as a % of NII 59.63% 57.52% Return on Assets (ROA) 1.52% 1.50% Return on Net worth (RONW) 20.55% 18.48% Per Employee Business ( in INR mn) 65.10 56.51 Per Employee Profit (in INR mn) 0.58 0.50 EPS (in INR.) – FV INR1/- Share 4.03 3.23 Key business indicators Key indicators 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 Key highlights

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23 Particulars Q1 FY 11 ( in INR mn) Q1 FY 10 ( in INR mn) Absolute Growth % Growth Direction Deposits 106,096.5 83,767.2 22,329.3 26.6% Advances 72,096.6 55,366.5 16,730.1 30.2% Total Business 178,193.1 139,133.7 39,059.4 28.1% CASA 21,672.4 15,234.0 6,438.4 42.3% Gross NPA 934.4 1087.2 -152.8 Net NPA 389.2 798.5 -409.3 Gross NPA (%) 1.30% 1.96% Net NPA (%) 0.54% 1.45% Return on Assets 1.52% 1.32% Net Interest Margin 3.56% 2.79% Q1 FY11 performance – A snapshot Financial Performance – Q1 FY 11 Vs Q1 FY 10 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% Key highlights

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24 Particulars Q1 FY 11 ( in INR mn) Q1 FY 10 ( in INR mn) Absolute Growth % Growth Direction Net Interest Income 921.7 562.7 359.0 63.8% Other Income 321.2 259.4 61.8 23.8% Operating Exp 456.9 349.6 107.3 30.7% Operating Profit 786.1 472.5 313.6 66.4% Net Profit 443.7 315.4 128.3 40.7% Q1 FY11 performance – A snapshot Financial Performance – Q1 FY 11 Vs Q1 FY 10 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 Key highlights

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25 CUB has reported strong growth in deposits and advances in the last few years Strong deposit and advances growth Steady increase in advances Steady increase in deposits 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 – 30% CAGR – 27% Steady increase in CASA CAGR – 27%

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

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

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28 Particulars (Rs in Mn) Q1 FY 11 Q1 FY 10 % of Change SLR 27,634.5 23,774.1 16.2% Non SLR 6,510.6 4,334.5 50.2% Total Investments 34,145.1 28,108.6 21.5% Total Return on Investments 7.1% 7.2% Investments Breakup: - A F S 3,042.0 7,502.5 -40.6% - H T M 31,003.5 20,606.1 50.46% - H F T 99.6 0.0 Total Investments 34,145.1 28,108.6 21.9% M D – AFS 2.31 1.76 M D – HTM 5.88 6.39 M D – HFT 6.03 - M D – Overall 5.48 4.98 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.

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29 Loans Composition Amount (in INR mn) % to Total Advances Construction (Comm Real Estate) 2,501 3% Textiles 8,346 12% Food Processing 1,368 2% Iron & Steel 3,183 4% Paper & Paper products 1,550 2% Other Metal & Metal Products 1,147 2% Other Industries 2,255 3% Advances to Major Industries as on 30 th June 2010 Loan book – Major Industry wise exposure

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30 Loan book – Major Sector wise Exposure & Regulatory Classification Classification Amount ( in INR mn) % to Total Adv Corporates 24,876.8 34% Regulatory Retail 30,707.8 43% NBFC 1,902.9 3% Other Advances 14,609.0 20% Gross Loans Total 72,096.5 Regulatory Classification of Advances as on 30 th June, 2010 Major Sector Amount ( in INR mn) % to Total Adv M S M E 23,918.4 33% Agriculture 7,588.3 11% Large Industries 3,950.8 5% Retail Traders 6,930.7 10% Wholesale Traders 8,138.6 11% Major Sector wise Advances as on 30 th 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

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31 Loan book products composition Loan Products Combination Amount ( in INR mn) % to Total Adv Demand loans 17,046.4 23% Term loans 25,701.8 36% Overdraft / Cash credit 28,066.7 39% Bills Purchased / Discounted 1,281.7 2% Gross Loans Total 72,096.6 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 Loan Products composition as June 30, 2010

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32 Asset quality is showing continuous improvement 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 Gross NPA & Net NPA - Quantum Gross NPA & Net NPA - % NPA – AN ANALYSIS – LAST 5 YEARS

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33 Restructured Accounts No .of Borrowers Amount ( in INR mn) Restructured in I Phase – FY 2008-09 213 3,187.9 Restructured in II Phase – FY 2009-10 51 1,655.6 Total 264 4,843.5 Out of the above, Accounts closed till 31.03.2010 89.0 Accounts turned as NPA 181.3 Amounts repaid till 31.03.2010 885.6 Balance outstanding as at 31.03.2010 3,687.6 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 30 th June 2010 – Rs.3474.6 Mns

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34 Income and Expenses break up Particulars March’ 10 ( in INR mn) March’ 09 ( in INR mn) % Change Interest expended 6,785 5,618 20.8% Employee cost 801 650 23.2% Other operating exp 857 746 14.9% Total expenses 8,443 7,014 20.4% Expenses break up Particulars March’ 10 ( in INR mn) March’ 09 ( in INR mn) % Change CEB & Charges 690 598 15% Treasury Income 458 480 - 4.6% Suit Recoveries 260 141 84% Others 27 18 50% Total Other Income 1435 1237 16.0% Other income break up Particulars March’ 10 ( in INR mn) March’ 09 ( in INR mn) % Change Interest on Loans 7,558 6,553 15.3% Interest on Investments 1,937 1,424 36.0% Other Interest Income 71 67 5.97% Total expenses 9,566 8,044 18.9% Interest income break up

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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

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36 5. Strategy

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37 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 Our four pronged strategy going forward…

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38 6. Recognitions

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39 Ranking by Magazine – “The Chartered Financial Analyst”

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40 No.1 in Customer Satisfaction awarded by IBA Clusters 5 + 6 City Union Bank 96 Tamilnad Mercantile Bank 96 Karur Vysya Bank 94 Yes Bank 93 Ratnakar Bank 93 Lakshmi Vilas Bank 93 Indus Ind Bank 91 Nanital Bank 91 HSBC 88 Kotak Mahindra Bank 88 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

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