The Board of Directors of your Bank is pleased to present the Annual Report on business and operations of your Bank together with the Audited Financial Statements for the Financial Year ended March 31, 2026.

Global

During the first half of FY 2025-26, global economy although already plagued by prolonged conflicts in West Asia and the Russia-Ukraine region, exhibited notable resilience amid heightened trade tensions and policy uncertainty. There was a surge in stockpiling of traded goods and increased spending on Artificial Intelligence (AI), signifying a strong risk appetite amidst rising trade barriers. In February 2026, the world witnessed a high level of escalation in the US-Iran conflict, which caused severe trade and supply disruptions with the prolonged shutdown of the prominent Strait of Hormuz, which is one of the world's most vital arteries of energy related trade. As a result, the global growth is experiencing strong headwinds with a sharp rise in energy prices and shortages of vital inputs such as crude oil, thereby escalating the geopolitical risk premium in the oil markets severely affecting maritime trade & commerce. Although global commodity prices of metal and gold have moderated, the financial markets have been experiencing extreme volatility.

The Global Banking Industry recorded the strongest Financial performance in over a decade in Calendar Year ['CY'] 2025. The Net Interest Margins of major banks expanded across the advanced economies. The Return on Equity, one of the major barometers of financial heath, for large banks exceeded 12% in America and 10% in Western Europe for the first time ever since the Global Financial Crisis. With the Central banks across Western Economies cutting rates, banks with stronger balance sheet and provisioning buffers built during years of higher rates, were better placed to manage losses without adversely affecting the capital base. The International Monetary Fund in its April 2026, World Economic Outlook, projected global growth at 3.1% for CY 2026 revised downwards from the earlier forecasts, due to drag in Trade policy, geo political conflicts and lingering effects of the global monetary tightening cycle. The IMF further predicts that the prolonged West Asia Conflict, would keep energy prices elevated, decelerate growth in oil importing economies, with little elbow room available for Central banks to ease rates.

Indian

At the commencement of FY 2025-26, the Indian economy was supported by momentum in private consumption and capital formation. The above-normal south-west monsoon resulted in a boost to rural consumption, expansion in services sector and a revival in urban consumption ably supported by an increase in private-sector investment activity. During the reporting year, India's Gross Domestic Product (GDP) registered a six-quarter high of 8.2% due to strong domestic demand (Festive season period) even amidst global trade & policy uncertainties. The Agriculture sector was supported by healthy Kharif crop production, higher reservoir levels & rabi crop production.

During the first half of the CY 2026, the domestic economic activity remained largely steady, even amidst the uncertainties experienced due to the prolonged West Asia Conflict. Merchandise exports recorded strong growth in April 2026, even though Freight & Insurance costs remained high. This year the south-west monsoon is expected to be deficient, particularly in parts of North and North-western India, potentially impacting agricultural activity and rural demand. However, the programmes and initiatives for crop diversification, water harvesting and conservation, climate-resilient practices, and short duration crops are expected to mitigate the impact. Services sector remained robust and sustained the momentum of the previous year, with GST rationalization and stable employment conditions supporting urban consumption. Sustained credit flows from banking & non-banking channels, Government CapEx programs, opening of the insurance sector to 100% FDI, ethanol blending program for energy transition etc., are expected to give a boost to investment activity in the near term. The headline CPI inflation stood at 3.5% in April 2026, driven primarily by elevated food & fuel prices. Since May 2026, the retail crude prices have gone up cumulatively by 7.4%, for petrol and 8.4% for diesel.

The impact of higher global energy prices is also being felt in other inputs such as Commercial LPG, Industrial raw materials, chemicals, rubber & plastic products. Considering all the factors, the overall CPI inflation for FY 2026-27 is projected to be 5.1%, with Q1 at 4.2%, Q2 at 5.1%, Q3 at 5.9% & Q4 at 5.4%.

Several measures undertaken by the Government, including ECLGS 5.0 ( Emergency Credit Line Guarantee Scheme) aimed at supporting the MSME & export sector, sustained efforts to increase domestic gas and crude oil supplies, and the promotion of domestically produced goods over imports, have strengthened the domestic economy's resilience to external shocks. On the external financing front, buoyant Foreign Direct Investment (FDI) and higher net FDI in 2025-26 reflect the sustained interests of global investors in India. However, during FY 2026-27, net FPI into India witnessed an outflow of USD 13.7 billion primarily from the equity segment. As on May 29, 2026 India's foreign exchange reserves stood at a healthy USD 682.3 billion.

Looking ahead, elevated energy and other commodity prices along with supply disruptions are likely to impact economic activity. Considering these factors, real GDP growth for FY 2026-27 is projected at 6.6% quarterly growth, with 6.6% in Q1, 6.3% in Q2, 6.5% in Q3 and 6.8% in Q4.

OUTLOOK

Considering the higher commodity and energy prices and shortage of inputs due to the issues in the Strait of Hormuz, the Central Government has been proactive in ensuring an adequate supply of inputs across critical sectors. On the services side, there has been a sustained momentum in the economic activity, due to GST Rationalization, healthy Balance Sheets of Financial Institutions and Corporates. Agricultural sector's prospects are supported by healthy reservoir levels, while Business expectations remain optimistic owing to the Government's focus on scaling up domestic manufacturing, across several strategic and frontline sectors supported by strong credit growth. Revival in private sector investment, is also expected to augur well for India's growth prospects. On the external front, merchandise exports in FY 2026-27 are likely to be adversely affected by disruptions to key shipping routes, escalation in freight & insurance costs and lower demand due to the prolonged West Asia conflict. Considering all these factors, real GDP growth for FY 2026-27 is projected at 6.6%, with Q1 at 6.6%, Q2 at 6.3%, Q3 at 6.5% and Q4 at 6.8% with the risks evenly balanced.

India, today stands at a juncture of relatively better macro-economic performance, despite geopolitical uncertainties, and volatile commodity market conditions. Domestic economic activity has exhibited resilience, supported by strong performance in industrial and services activity, broad-based demand and robust corporate performance. Inflation and external vulnerabilities are within the manageable limits. The Indian Financial system is entering this phase of global uncertainty with much stronger and healthier Balance Sheets, comfortable capital buffers, improved profitability and Non- Performing Assets (NPA's) at multi-decade lows.

BANK's PERFORMANCE

In the above backdrop, your Bank recorded a total business of Rs. 1,45,007 crore in FY 2026, a 24% increase of

28,415 crore over the previous year figure of Rs. 1,16,592 crore. The Net Profit of the Bank has increased to Rs. 1,326 crore from 1,124 crore, 18% increase over FY 2025 position. The Net Interest Income of the Bank stood at

2,830 crore. The Key Performance Indicators i.e., the Return on Assets of the Bank stood at 1.56%, Return on Equity stood at 13.35%, the Net Interest Margin of the Bank stood at 3.74% and the Cost to Income ratio stood at 47.93% during the reporting year. The financial performance has been discussed in detail in the subsequent paragraphs. During the year the Bank opened 74 additional branches to total 949 branches and has 1,764 ATM's as at March 31, 2026. Further information on the state of affairs of the Bank has been discussed in detail in the Management Discussion and Analysis Report forming part of this Report.

FINANCIAL HIGHLIGHTS

The Deposits and Advances for the current year stood at 78,308 crore and 66,699 crore respectively. The total business stood at 1,45,007 crore as compared to 1,16,592 crore for the previous year registering a growth of 24%. The size of the Balance Sheet as on March 31, 2026 is 97,024 crore as compared to 77,623 crore last year recording an increase of 25%.

The Gross NPA and Net NPA for the year under review stood at 1.91% and 0.68% respectively as compared to 3.09 % and 1.25% in the previous year.

The provision for tax for the reporting year stood at 345 crore. The provision for NPA for the financial year was

254 crore vis-a -vis 255 crore last year. The total provision increased by 133 crore to 688 crore from

555 crore in the previous year.

Domestic Treasury

The gross investments rose from 17,346 crore to

19,019 crore as of 31 March 2026. Out of this, total investments in Government Bonds alone were 18,873 crore, making up 99.23% of total Investments. The financial year started positively with a 25-basis point cut in repo rate, driven by inflation (CPI) falling to a six-year low of 3.2% and Brent Crude oil prices dropped from $72 to $62 per barrel due to increase in supply. The JP Morgan Government Bond Index-Emerging Markets (GBI-EM) has reached 10% weightage by regular inflow of FPI of $20 -$25 billion in April 2025. US treasury yields were volatile ranging 4% to 4.50% influenced by US trade policy announcements and geopolitical tensions. The US Fed reduced its policy rate cumulatively by 75 bps during the year. The Reserve Bank of India announced CRR cut by 100 bps and REPO rate cut by 125 bps during the year. RBI also injected durable liquidity of 16.30 trillion into the banking system through multiple rounds of Open Market Operations (OMOs), buy / sell swaps in forex markets and VRR to manage tightening cash conditions. In FY 2026, benchmark bond yields touched a low of 6.10% and reversed swiftly during the course of the year and closed at 7.03% on account of US trade tariff and West- Asia geopolitical tension. The Bank booked a profit of 96.84 crore during the year.

Forex Treasury

During the FY 2025-26, the Indian Rupee depreciated by roughly 11% against US dollar, hitting its weakest level in over a decade, closing near 94.83. The Rupee crossed the

95 per USD mark for the first time in late March 2026. The main reasons behind the Rupee's decline include persistent Foreign Portfolio Investor (FPI) outflows, elevated crude oil prices amid West Asia geopolitical tensions. Currently, the RBI has adopted a more ‘pragmatic and flexible' stance, letting the Rupee find its market level instead of defending specific thresholds- a shift from its earlier policy. India's real GDP growth for FY 2026 projected at 7.6%, driven mainly by strong domestic consumption and investment. Indian forex reserves rose slightly to $688.06 billion as of March 31, 2026. The Japanese Yen experienced sharp volatility on carry trade unwinding when Bank of Japan-Central Bank raised its interest rate. As the Yen strengthened, it erased the carry-trade gains, forcing position to be unwound quickly. During the First & Second quarters, the US 10-Year Treasury yield surged to its highest level of 4.48% and crude oil prices went up to $120 per bbl due to the uncertainty over the import tariff imposed by US President, Donald Trump. In FY2025-26, profit on foreign exchange operations was 60.82 crore compared with 37.71 crore in the previous financial year.

Net Worth

The paid-up Share Capital of the Bank increased to 74.30 crore as on March 31, 2026 from 74.10 crore as on March 31, 2025. During the reporting period, the Bank has allotted 20,61,528 Equity Shares to employees under Employee Stock Options pursuant to CUB ESOS Scheme 2008 & CUB ESOS Scheme 2017.

The Net worth of the Bank stands improved to 10,458.24 crore as on March 31, 2026 from 9,416.87 crore as on March 31, 2025.

Capital Adequacy Ratio

As of March 31, 2026, the Bank maintained a strong capital position with a Tier I Capital Adequacy Ratio (CRAR) of 20.82% and Total CRAR of 21.92%, significantly exceeding the RBI-prescribed Basel III minimum requirement of 11.50%, including the Capital Conservation Buffer (CCB) of 2.50%. Tier I Capital and Tier II Capital are 10,116.06 crore and 534.64 crore respectively as on March 31, 2026. The substantial capital buffer underlines the Bank's financial strength, resilience, and capacity to support future business growth and take care of potential stress scenarios.

BONUS SHARES

The Board of Directors of your Bank at its meeting held on April 27, 2026, recommended the issue of bonus equity share in the ratio of 1 equity share for every 3 equity shares of face value of 1/- each (1:3) and the same was approved by the shareholders of the Bank through Postal ballot on May 29, 2026 with a requisite majority.

Accordingly, 24,76,96,809 Bonus shares were allotted on June 15, 2026 to the eligible shareholders as on the record date i.e., June 12, 2026.

DIVIDEND

The Board of Directors of the Bank at its meeting held on April 27, 2026, had recommended a Dividend of 200% i.e. 2/- per equity share on face value of 1/- each fully paid up for the Financial Year ended March 31, 2026 subject to the approval of shareholders at the ensuing Annual General Meeting. The dividend, if declared at the AGM, will be paid to the shareholders as on the record date specified for such purpose, within the prescribed timelines. The dividend payout for FY 2026 is in accordance with the Dividend Distribution Policy of the Bank and the same has been uploaded in the website of the Bank. Weblink:

https:// www.cityunionbank.bank.in/filemanager/Jun26/Dividend_Distribution_Policy_2026.pdf

In case any shareholder has not claimed dividend(s) for previous year(s), they may kindly approach the Bank or its Registrar and Transfer Agents. The details of Unclaimed Dividends and transfers to IEPF Account of Govt. of India is given in a separate Report on Corporate Governance forming a part of this Report.

BRANCH EXPANSION

During the financial year, the Bank expanded its branch network by adding 74 more branches across the country totalling 949 branches as on March 31, 2026. The total ATMs stood at 1,764 which performs the job of accepting and dispensing cash. As on March 31, 2026 the Bank had a total of 1,273 onsite ATMs and 491 offsite ATMs.

As for the Branch spread, as on March 31, 2026, 81% of branches are operational in South, 7% in West, 7% in North, 4% in Central and 1% in Eastern parts of India.

FINANCIAL INCLUSION

Financial Inclusion is a concept where the banking financial solution and services are offered to every individual without any form of discrimination, ensuring that even the underprivileged get easy access to banking channels. A detailed information on financial inclusion aspects of the Bank is set-out in Management Discussion & Analysis Report forming a part of this report.

HUMAN RESOURCE DEVELOPMENT

The details on the Human Resource Management functions of the Bank are set-out in detail in Management Discussion and Analysis Report which forms part of this Report.

EMPLOYEES STOCK OPTION SCHEME (ESOS)

The Bank has implemented Employee Stock Option Scheme 'CUB ESOS 2008' ['ESOS'] for grant of stock options to eligible employees of the Bank. The Shareholders of the Bank approved the scheme on April 26, 2008 at an ExtraOrdinary General meeting of the Bank. The maximum aggregate number of options that may be granted under this scheme is 5 Crore. The Bank offers ESOS to its employees which vests over a period of five years from the date of grant of options i.e., 15% options each for first three years, 25% and 30% for fourth and fifth year respectively. The options are offered at prevailing market prices at the time of grant to the employees. However the same is adjusted pursuant to corporate actions viz., Rights issue, Bonus issue etc. There were no material changes in the ESOS of the Bank during the period under review and the same is in compliance with the provisions of SEBI (Share Based Employee Benefits) Regulations, 2021 as amended from time to time ("SEBI SBEB Regulations"). As at the end of March 31, 2026, the Bank has 12,50,436 outstanding options for grant under the scheme.

In addition, the shareholders of the Bank at its meeting held on August 23, 2017 approved CUB ESOS Scheme 2017 for 3 Crore options on terms and conditions mostly similar to previous one. As on March 31, 2026, 2,56,20,900 options are yet to be granted under the Scheme. The disclosures pursuant to Regulation 14 of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 has been hosted in the website of the Bank and also the same is annexed hereto as Annexure I.

Weblink:

https://cityunionbank.bank.in/filemanager/Jul26/CUB_Valuation_Report_ESOP_2026.pdf

NEW TECHNOLOGY INITIATIVES

In order to keep pace with requirements of present generation and to offer speedy and secured tech products / services, the Bank has taken the following initiatives during the year 2025-26:

Co-Branded Credit Card Salary-se

The Bank tied up with Fintech Salary-se as Exclusive Credit Card Partner for Corporate Salary Employees. Under this program the bank has issued co-branded Credit card to customers who are eligible as per the eligibility criteria. These cards come up with benefits like Reward Programs, exclusive offers etc.

Kavach - Secured Credit Card

End to End D-I-Y (Do It Yourself) journey where existing customer can instantly get Credit card by placing lien on existing deposits or by placing new deposits. This journey is also available for New to Bank Customers who can instantly place deposit via UPI and can get instant Credit Card. This Credit Card shall get added to any UPI app for instant payments.

Global Fintech Fest (GFF)

The Bank has participated in the Global Fintech Fest (GFF) at Mumbai. As part of the same, Bank initiated the following projects:

Multi Signatory Workflows via UPI for Corporates

This pioneering solution enables multiple authorizations within a single UPI transaction, transforming how organizations, joint account holders and corporates manage digital approvals and payments.

UPI Cash Withdrawal at BC (Micro-ATM)

At BC outlets, UPI QR based cash withdrawal is enabled where any bank customer can use UPI app to scan and authenticate and collect cash from BC. This method allows upto Rs. 5,000/- per transaction, Rs. 10,000/- as daily limit and Rs. 50,000/- as monthly limit.

Bio Auth for UPI ( finger Print / face )

"Bio Auth for UPI" is a new feature that allows users to authenticate transactions using biometric data (Fingerprint or Facial recognition) instead of UPI PIN. This uses on-device Biometric authentication registered in the mobile device of the Customer.

Face Authentication for UPI

This feature is primarily for new users or those who want to set or reset their UPI PIN without the need of a debit card or an Aadhar OTP.

UPI Help (SLM Chatbot)

NPCI SLM chatbot has been designed to give 24/7 Instant Assistance to customers for their grievances related to Mandate and NPCI Payment related queries. To enhance user engagement by providing intelligent conversational support.

UPI Circle My Devices (IoT Payments)

UPI is now integrated with Internet of Things (IoT) devices to enable automated, device initiated payments and this feature shall allow TV, Car, etc. to make payments through a linked Secondary UPI ID, managed via the primary mobile app, with an overall goal of creating more seamless and hands-free financial transactions.

UPI Reserve Pay (Single Block Multiple Debit SBMD)

The UPI Single Block and Multiple Debits (SBMD) is a mechanism wherein the customers shall block funds in their bank accounts towards a definite goods or services, and debit shall be initiated by the service provider as and when required on a periodic basic till the blocked funds gets exhausted or the mandate service is cancelled / revoked.

Loan against Mutual Funds

Facility has been enabled to open Loan against Mutual Funds for New To Bank customers via Fintech collaborations. The entire Journey is D-I-Y (Do It Yourself) where the journey covers customer on-boarding, Choosing Mutual Funds, Lien marking , Creating LAMF overdraft account.

CUB Desire (NTB Flow)

In order to Target New to Bank customers, option is made available to open a systematic savings plan with Goal for Exiting CUB customers and NON-CUB Customers to save easily and fulfil their dreams and future plans.

CUB Depend - Credit Line on UPI

We initially launched Credit Line on UPI for pre-approved customers based on their Fixed Deposit as collateral. It is a fully digital secured Credit Line on UPI backed by Fixed Deposits.

CUB RuPay MSME Card

A Corporate / MSME card is proposed for the employees of a corporate or the promoters of an MSME company under the liability of the corporate entity. The card will be used exclusively for business purposes and will be based upon underwriting done on the corporate rather than on the individual.

Software Bill of Materials

A Software Bill of Material (SBOM) is a detailed list of the various components available in a software covering components, libraries, dependencies within a software product including details like versions, licenses etc. As per the regulatory direction, we have implemented the same in our environment during this financial year.

Kyndryl Resilience Orchestration

During this financial year, we have extended the IBM Kyndryl Resilience Orchestration (RO), an orchestration solution that helps organizations plan, test, and execute disaster recovery processes automatically in our IT environment.

Oracle Golden Gate

Oracle Golden Gate is a high-performance software package for real-time data integration and replication. It uses a log-based Change Data Capture (CDC) mechanism to move data between source and target systems with sub-second latency, without placing a heavy load on the databases involved.

Oracle Enterprise Manager

Oracle Enterprise Manager enables administrators to monitor system performance, detect issues pro-actively, automate administrative tasks, and maintain high availability across enterprise IT environments.

IBM LinuxOne

This IBM LinuxOne is designed exclusively to run Linux workloads. It provides a highly secure and energy efficient infrastructure for high volume and mission critical applications. Enterprise security, confidential computing, massive consolidation and unmatched uptime are few of its benefits.

OTHER BUSINESS ACTIVITY

The Bank has Corporate Agency tie-up with the following 8 Insurance Companies for augmenting the Non-interest Income:

A) Life Insurance Business:

LIC of India

Bajaj Allianz Life Insurance Company

TATA AIA Life Insurance Company

B) Standalone Health Insurance Business:

Star Health and Allied Insurance Company Ltd Aditya Birla Health Insurance Company Care Health Insurance

C) General Insurance Business:

Royal Sundaram General Insurance Company

Shriram General Insurance Company

The Bank offers Insurance products of all the above companies to its customers. During the reporting year the Bank has earned a fee income of 139.27 crore as against

97.56 crore in the previous year, through cross selling of Insurance products.

The Bank is also offering following additional services to all its Customers through Net Banking & Mobile Banking Platforms:

a. Demat , Trading and Mutual Fund

b. Demat A/c from our own DP with NSDL

c. Trading A/c from our tie up with Integrated Enterprises (India) Pvt Ltd.

d. Mutual Fund investment solution

The Bank has tie ups with:

a. Finwizard Technology Pvt Ltd (widely known as FISDOM) - Bank's Customers can invest in Mutual Fund Units through Bank's Mobile Banking App and Demat Account is not required for this purpose.

b. Integrated Enterprises (India) Pvt Ltd. (Integrated) for customers having Demat with us and trading with Integrated can hold units in Demat Account and Statement of Accounts also.

SUBSIDIARIES AND ASSOCIATES

Your Bank does not have any Subsidiaries or Associates to mention under this Report.

BOARD MEETING

The Board meetings of the Bank were held in accordance with the provisions of the Companies Act, 2013, the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ['Listing Regulations']. During the year under review, 11 (Eleven) meetings were held. The details of such meetings along with the constitution of the Board and its Committees are given under the Report on Corporate Governance forming a part of this Report.

Shri Narayanan Subramaniam (DIN 00166621)

Pursuant to the provisions of Section 10A(2A)(i) of the Banking Regulation Act, 1949, as amended, read with relevant provisions of Reserve Bank of India (Commercial Banks - Governance) Directions, 2025, Shri Narayanan Subramaniam, Independent Director of the Bank, completed his 8 year tenure on the Board of the Bank and vacated his office on the close of business hours of June 19, 2025.

The Board hereby places on record its warm appreciation for the excellent services rendered by Shri Narayanan Subramaniam during his tenure.

Shri V. N. Shivashankar (DIN 00929256)

Pursuant to the provisions of Section 10A(2A)(I) of the Banking Regulation Act, 1949, as amended, read with relevant provisions of Reserve Bank of India (Commercial Banks - Governance) Directions, 2025, Shri V. N. Shivashankar, Independent Director of the Bank, completed his 8 year tenure on the Board of the Bank and vacated his office on the close of business hours of February 06, 2026.

The Board hereby places on record its warm appreciation for the excellent services rendered by Shri. V. N. Shivashankar during his tenure.

Dr. T. S. Sridhar (DIN 01681108)

Pursuant to the provisions of Section 10A(2A)(I) of the Banking Regulation Act, 1949, as amended, read with relevant provisions of Reserve Bank of India (Commercial Banks - Governance) Directions, 2025, Dr. T. S. Sridhar, Independent Director of the Bank, completed his 8 year tenure on the Board of the Bank and vacated his office on the close of business hours of February 06, 2026.

The Board hereby places on record its warm appreciation for the excellent services rendered by Dr. T. S. Sridhar during his tenure.

Dr. N Kamakodi (DIN 02039618)

Pursuant to the relevant provisions of Reserve Bank of India (Commercial Banks - Governance) Directions, 2025 read with RBI letter No.DoR.Gov.No.438/ 08.42.001/2023-24 dt. April 26, 2023, Dr. N. Kamakodi demitted his office at the close of business hours on April 30, 2026 after completing his 15 year term as the Managing Director & CEO of the Bank.

Under his stewardship as the MD & CEO, the Bank has achieved remarkable growth in Business from

22,170 crore in 2011 to 1,44,183 crore in 2026, while its geographical presence grew from 246 to 1,000 Branches in April, 2026. The Bank also witnessed significant milestones in various areas - capital augmentation through Rights Issue, Qualified Institutional Placement [which also roped in foreign institutional investments into the Bank], and Bonus issues, Digital transformation, new employee welfare measures, CSR and Sustainability initiatives.

The Board hereby places on record its warm appreciation for the outstanding and visionary leadership of Dr. N Kamakodi and the extraordinary services rendered by him during his tenure.

Shri. R. Vijay Anandh (DIN 09656376)

During the year, the RBI vide its letter no. DoR.Gov.No.8438/ 08.42.001/2025-26 dated February 9, 2026, had approved the appointment of Shri. R. Vijay Anandh as the Managing Director & CEO of the Bank for a period of 3 years w.e.f. May 1, 2026 and the same was approved by the Shareholders on April 3, 2026 through Postal Ballot by way of remote e-voting. Shri. R. Vijay Anandh took charge as the Managing Director & CEO of the Bank w.e.f. May 1, 2026.

Shri. K. Subramanian (DIN 11519754)

During the year Shri K. Subramanian was initially co-opted as an Additional Director by the Board (not liable to retire by rotation) at its meeting held on February 2, 2026 pursuant to the provisions of Section 161(1) of the Act w.e.f. February 2, 2026 up to June 30, 2030. The Shareholders of the Bank have approved his appointment as an Independent Director w.e.f. February 2, 2026, through Postal Ballot by way of remote e-voting on April 3, 2026.

Shri. R. Mohan (DIN 06902614)

Shri. R. Mohan was initially co-opted as an Additional Director by the Board (not liable to retire by rotation) at its meeting held on April 27, 2026 pursuant to the provisions of Section 161(1) of the Act w.e.f. April 27, 2026 up to May 15, 2030. The Shareholders of the Bank have approved his appointment as an Independent Director w.e.f. April 27, 2026, through Postal Ballot by way of remote e-voting on May 29, 2026.

Directors to retire by Rotation

All directors on the Board except Shri. R. Vijay Anandh, Managing Director and CEO and Shri. V. Ramesh, Executive Director of the Bank are Independent Directors. Independent Directors are not required to retire in terms of Section 149(13) of the said Act. Further, as per the provisions of Section 152(6) of Companies Act, 2013 read with Article 26(b) of the Articles of Association of the Bank, none of the Executive / Whole-time Directors are subject to retirement by rotation. Therefore, no Director including MD & CEO and Executive Director are required to retire by rotation at the ensuing Annual General Meeting.

Declaration by Independent Directors

The Bank has received relevant declarations from all the Independent Directors under Section 149(6), 149(7) of the Companies Act, 2013, notifications issued by the Ministry of Corporate Affairs and SEBI Listing Regulations, 2015 as amended. The Board is satisfied that the Independent Directors meet the criteria of independence as stipulated under the aforesaid provisions of the Companies Act, 2013.

Further, in compliance with MCA Notification No. G.S.R 805(E) dt. October 22, 2019, all Independent Directors of the Bank have registered themselves in the Independent Directors data Bank of Indian Institute of Corporate Affairs and are qualified / exempt from undertaking self- assessment exam.

Familiarization program for Independent Directors

The details on programme for familiarization of Independent Directors with the Bank, their role, rights and responsibilities in the Bank and related matters are provided separately under the Corporate Governance Report forming a part of this Annual Report.

Performance Evaluation

In line with the provisions of the Companies Act, 2013, SEBI Listing Regulations, 2015 and relevant notifications / guidelines issued by SEBI in this regard, there exists an evaluation matrix approved by the Nomination and Remuneration Committee of the Board which is used for carrying out the performance evaluation of the Board as a whole, its Committees as well as Independent Directors, MD & CEO, Executive Director and Chairman.

The necessary evaluations / review were carried out by the Board and Independent Directors to determine the effectiveness of the Board, its Committees, MD & CEO, Chairman and individual Directors. Additional information on performance evaluation is set out in Corporate Governance Section forming a part of this Annual Report.

Key Managerial Personnel (KMP)

In terms of Section 203(1) read with Section 2(51) of the Act and Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Bank had the following KMPs as on March 31, 2026:

l Dr. N. Kamakodi - Managing Director & CEO l Shri. R. Vijay Anandh - Executive Director l Shri. V. Ramesh - Executive Director l Shri. J. Sadagopan - Chief Financial Officer l Shri. Venkataramanan S - Company Secretary

Joint Statutory Central Auditor

M/s. P. B. Vijayaraghavan & Co., Chartered Accountants, Chennai (FRN 004712S) & M/s. M. Srinivasan & Associates, Chartered Accountants, Chennai (FRN 004050S), Joint Statutory Central Auditors ("SCAs") of the Bank will retire at the conclusion of ensuing AGM for their second year. The Joint Statutory Central Auditors have furnished their Report for FY 2026 which forms a part of this Report and there are no qualifications, reservations or adverse remarks made by the Auditors in their Report. Further, the Auditors of the Bank have not reported any fraud under Section 143(12) of the Companies Act, 2013.

As per RBI circular, No. DoS.CO.ARG / SEC.01 / 08.91.001 / 2021-22 dated April 27, 2021 read with the policy of the Bank on appointment of SCAs and the provisions of Section 139 of the Companies Act, 2013 and subject to the approval of RBI, the Board as per the recommendations of Audit Committee had considered & approved the reappointment of M/s. P. B. Vijayaraghavan & Co., Chartered Accountants, Chennai (FRN004712S) & M/s. M. Srinivasan & Associates, Chartered Accountants, Chennai (FRN 004050S) as the Joint Statutory Central Auditors of the Bank for FY 2026-27 for their third and final term.

With respect to the above appointments, the Bank has received the consent from such Auditors and confirmation to the effect that they are not disqualified to be appointed as Joint Statutory Central Auditors of the Bank in terms of Companies Act, 2013 & the rules made there under and RBI guidelines.

The RBI vide its letter ref.CO.DOS.RPD.No.S2057/ 08.13.005/2026-27 dt. June 16, 2026 has approved of the appointment of the aforesaid SCAs for FY 2027. The Members are requested to consider and approve their appointments as Joint Statutory Central Auditors of the Bank as per the agenda set out in the Notice calling this Annual General Meeting.

Secretarial Auditor

Pursuant to Section 204 of the Companies Act, 2013, read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and Regulation 24A of SEBI Listing Regulations, 2015 as amended, Shareholders at the Annual General Meeting held on August 13, 2025 had appointed M/s. KUVS & Associates, Practicing Company Secretaries, Tiruchirappalli a Peer Reviewed Firm holding Peer Review Certificate No. 6318/2024 dated

December 16, 2024 issued by the Institute of Company Secretaries of India, as the Secretarial Auditor for a period of 5 (five) years to conduct the Secretarial Audit of the Bank from the FY 2026 to FY 2030.

As regards FY 2026, the Report of Secretarial Auditor 'Secretarial Audit Report' in the prescribed format is annexed to this Report as Annexure II. In addition, pursuant to Regulations 24A of SEBI Listing Regulations, 2015, read with relevant SEBI circular, the Bank has obtained Secretarial Compliance Report certified by the above Auditor on compliance with all applicable SEBI regulations and circulars / guidelines issued thereunder and the copy of the same was submitted to the Stock Exchanges within due timelines. There are no adverse observations or remarks, reservations made by the Secretarial Auditor in their Report, except a penalty amounting to Rs. 70,500 imposed by the RBI. Further, on May 22, 2026, the RBI levied a penalty of Rs. 10,10,000 towards non-compliance with certain provisions of directions issued by RBI on Priority Sector Loan accounts and Reporting of Self Help Group (SHG) member level data to Credit Information Companies (CICs).

Cost Audit

The requirement of maintaining cost records u/s 148(1) of the Companies Act, 2013 is not applicable to the Bank.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with Section 134 (5) of the Companies Act, 2013, the Board of Directors of the Bank hereby declares and confirms that:

i) In the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures.

ii) The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Bank as at the end of the Financial Year and of the Profit & Loss of the Bank for that period.

iii) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing Banks in India for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities.

iv) The Directors had prepared the annual accounts on a going concern basis.

v) The Directors had laid down adequate internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

vi) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

INSIDER TRADING NORMS

The Bank has in place the Code of Conduct pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time ('SEBI PIT Regulations') to regulate, monitor and ensure reporting of trading by the designated persons and other connected persons. The said code is being reviewed by the Audit Committee / Board of Directors from time to time.

The code is adopted to maintain highest ethical standards in dealing with securities of the Bank by persons to whom it is applicable. The code of conduct and related policy are available in the Bank's website. Weblink:

https://www.cityunionbank.bank.in/filemanager/Jun25/PITPolicy_31.01.2025.pdf

All listed companies are required to maintain an in-house Structured Digital Database ("SDD") under Regulation 3(5) of SEBI PIT Regulations, 2015 and report Unpublished Price Sensitive Information (UPSI) under Regulations 9(2). In this regard, our Bank has in place the required software which has been integrated in the Bank's server. The trades of all Designated and Connected persons ("Insiders") are monitored on a continuous basis.

Further, in order to exercise additional vigil on the trades conducted by all Insiders, the PAN of all the Insiders are linked in the database of RTA and thereby the RTA furnishes a Weekly Report to the Bank on trades conducted by the Insiders. In addition, the SEBI as per its circular dated July 19, 2023 has notified the freezing of transactions related to the PAN of Insiders at Depository Level effective October 1, 2023. Accordingly, the Demat Accounts related to the PAN numbers of Insiders of the Bank are being frozen by our Designated Depository - NSDL for trading in the equity shares of the Bank, during the Trading Window Closure period beginning with the first day of the closure period till completion of two days after declaration of financial results.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE BANK AND SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS

There are no material changes and commitments affecting the financial position of the Bank which occurred between the end of the financial year of the Bank i.e., March 31, 2026 and the date of Directors' Report i.e., June 23,2026. In this connection, it needs to be mentioned, though not significant / material, during the reporting year, the RBI has levied a penalty of 70,500 towards Chest / ATM Cash out related transactions and some findings during the Incognito visits FY 2026. Further, on May 22, 2026, the RBI levied a penalty of 10,10,000 towards Non-compliance with certain provisions of directions issued by RBI on Priority Sector Loan accounts and Reporting of Self Help Group (SHG) member level data to Credit Information Companies (CICs).

POLICIES

Directors Appointment(s) and Remuneration / Compensation Policy

The Bank has formulated and adopted a policy on Board Diversity as per which the Nomination and Remuneration Committee of the Board ('NRC') conducts the preliminary assessment for appointment of Directors on the Board of the Bank and makes suitable recommendations to the Board for its consideration.

The NRC identifies and assesses the qualifications and positive attributes of the proposed candidate for the position of Director based on the disclosures / declarations received from such person under the Companies Act, 2013, the Banking Regulation Act, 1949 and also RBI guidelines. The NRC makes a thorough scrutiny of the prospective candidate and certifies the fit and proper status to the Board after exercising above due diligence process.

Apart from the above, the NRC before the appointment of an Independent Director also considers the Declaration on Independence furnished by the proposed candidate for the position of Director under Section 149 (7) of the Companies Act, 2013 and SEBI Listing Regulations, 2015. Further, the Bank has a Compensation Policy which is in accordance with the directives issued by the Reserve Bank of India. NRC oversees the framing, implementation and review of the Compensation Policy of the Bank. The Compensation Policy of the Bank is briefed under Corporate Governance Report forming a part of Annual Report and it is available at the Bank's website. Weblink:

https://www.cityunionbank.bank.in/filemanager/May24/Compensation%20Policy_26032024.pdf

RISK MANAGEMENT

Pursuant to Regulation 21 of SEBI Listing Regulations, the Bank has constituted the Risk Management Committee. The details of the said Committee together with the terms of reference are set out in the Report on Corporate Governance, which forms a part of this Annual report.

Further, the Bank has in place an Integrated Risk Management framework supported by detailed policies and processes for management of Credit Risk, Market Risk, Liquidity Risk, Operational Risk and various other Risks. The details on the Risk Management framework of the Bank is detailed in the Management Discussion and Analysis section appended to this Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

As per Regulation 34(2)(f) of SEBI Listing Regulations, 2015, your Bank has prepared the Business Responsibility and Sustainability Report setting out the Bank's Social, Environmental and Governance aspects.

The SEBI vide circular dated July 12, 2023 on BRSR Core - Framework for Assurance and ESG disclosures for value chain, notified Disclosures and Assurance for the value chain of top 500 listed entities (by market capitalization). Accordingly, the same is applicable for our Bank for FY2026. The Bank had appointed M/s. J. Sundharesan & Associates, Practising Company Secretaries, Bengaluru as its BRSR consultant and after conducting necessary due diligence they have issued Reasonable Assurance Report which is available in the link given below along with the BRSR. Weblink:

https://cityunionbank.bank.in/filemanager/Jul26/BRSR2026.pdf

DEPOSITS UNDER CHAPTER V OF COMPANIES ACT, 2013

Being a Banking company, as Section 73 of Companies Act, 2013 is not applicable, hence the disclosures as required under Rule 8(5)(v) & (vi) of the Companies (Accounts) Rules, 2014 are not applicable.

INTERNAL FINANCIAL CONTROL SYSTEMS & ITS ADEQUACY

The Bank has put in place adequate internal financial controls commensurate with the size and scale of its operations. The Bank has, in all material aspects, adequate Internal Control Systems over Financial Reporting and these controls have been designed to capture the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial

Reporting issued by the Institute of Chartered Accountants of India. Such Internal Financial Controls over Financial Reporting were operating effectively during the Financial Year. More details have been set out in Management Discussion and Analysis Report which forms a part of this Report.

RELATED PARTY TRANSACTIONS

The Board of Directors of the Bank has adopted a policy on Related Party Transactions which is in line with the Companies Act, 2013 and SEBI Listing Regulations, 2015. During the reporting year, all transactions with related parties of the Bank were in the ordinary course of business and on an arm's length basis. The Bank did not enter into any material transaction with such related parties, under Section 188 of the Companies Act, 2013, during the year. Form AOC-2, as required under Section 134 (3) (h) of the Companies Act, 2013, read with Rule 8 (2) of the Companies (Accounts) Rules 2014, is attached as Annexure III forming part of this Report. A detailed policy on the Related Party Transaction is available at the Bank's website. Weblink:

https://www.cityunionbank.bank.in/filemanager/Jun26/RPT_Policy_2026.pdf

LOANS, GUARANTEES AND INVESTMENTS

The Loans, Guarantees and Investments made in securities by the Bank are exempt pursuant to the provisions of Section 186 (11) of the Companies Act, 2013 and hence do not attract any disclosure required under Section 134 (3)(g) of the Companies Act, 2013.

ANNUAL RETURN u/s 92(3) OF COMPANIES ACT, 2013

The Annual Return pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12 (1) of the Companies (Management and Administration) Rules, 2014 is uploaded in the website of the Bank. Weblink:

https://www.cityunionbank.bank.in/filemanager/Nov25/MGT7-AB6841657.pdf

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In compliance with Section 135 of the Companies Act, 2013 (the Act) read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended from time to time and in consonance with the CSR policy, the Bank had undertaken a number of initiatives that contribute to society at large, in the areas of healthcare, education, environment, preservation & improvement of Water Bodies and preservation of the country's rich culture and heritage.

The Bank has established CUB Foundation, a non-profit entity to identify suitable deserving projects, recommend and oversee the CSR initiatives of the Bank. The Annual Return on CSR activities as required under Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules 2014 is furnished under Annexure IV to this Report.

Further, in accordance with Section 135(5) of the Act read with Rule 8(3)(a) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, two projects funded in FY 2025 i.e., "Kalvi Shakti Movement - Phase II" implemented in Tamil Nadu and "Vidya Shakti" implemented in Uttar Pradesh and Andhra Pradesh (funded by Open Mentor Trust which is an implementing trust of IIT pravartak) and "Semiconductor Packaging & Testing Facility - SASTRA," are required to undergo Impact Assessment through a third-party agency. Accordingly, assessment of such projects has been conducted by M/s. B Balaumasudhan & Co., Chartered Accountants, Chennai and they have submitted their report. As per MCA General Circular No. 14 / 2021 dt. August 25, 2021, a summary of such assessment reports are given hereunder while the complete report is given in the website of the Bank.

Kalvi Shakti Movement - Phase II & Vidya Shakti

The projects reached over 3 lakh students through technology-enabled learning platforms and Rural internet Centres, trained more than 7,500 teachers in digital pedagogy and provided employability training to 5000-6000 youth, resulting in placement opportunities. These projects also helped 88 students from Varanasi cleared the NMMS scholarship examination. The Digital Didis initiative empowered 425 women with digital literacy and 2 among them achieved "Lakhpati Didi" status. Supported by 2,105 Rural Internet Centers and 1,440 live online learning sessions, these projects has significantly enhanced access to quality education at a cost less than 35 per student per year, compared to a market rate of 3,000+. These projects has delivered measurable, sustainable and transformative impact across education, digital inclusion, employability and women's empowerment in rural India with a potential to scale 10? in near future. Weblink:

https://cityunionbank.bank.in/filemanager/Jun26/Impact_Assessment_Report_Final_Version.pdf

Semiconductor Packaging & Testing Facility - SASTRA (Phase I)

This project was aimed at imparting theoretical and experimental knowledge in electronic packaging & testing to develop quality manpower for India's growing semiconductor ecosystem. The facility is constructed within 3000 sq. ft and it comprise of 10,000 class and 1,00,000 clean rooms. The equipments were procured from leading global manufacturers based in several countries. Under this project, three faculty from SASTRA visited Lunghwas University of Science & Technology, Taiwan for hands-on training. During August 2025 and January 2026, SASTRA organized a two-day Indo-Taiwan Conference that had more than 900 participants and 140 delegates representing 20 industries and 25 academic institutions respectively. This project is expected to have over 1,000 beneficiaries annually, having 1,250 last year who will be provided with career paths, as SASTRA has signed MoU with Tata Electronics and Caliber Interconnects. The Phase II of the facility will be completed by December, 2026. Weblink:

https://cityunionbank.bank.in/filemanager/Jun26/SASTRA_Semiconductor_Phase_I_Report.pdf

DISCLOSURE TO BE MADE UNDER SECTION 177(8) OF COMPANIES ACT, 2013

The Board of the Bank had constituted the Audit Committee under the extant guidelines of Reserve Bank of India (RBI), provisions of the Companies Act, 2013 and SEBI Listing Regulations, 2015. The details of the composition of the Audit Committee are furnished in the Corporate Governance Report which forms a part of this Report.

CORPORATE GOVERNANCE

The Bank is committed to achieving the highest standards of Corporate Governance. It also adheres to the Corporate Governance requirements set by the Regulators / applicable laws. The Corporate Governance practices followed by the Bank aims to ensure value creation for all its stakeholders through ethical decision making and maintaining transparency.

A detailed Report on Corporate Governance standards followed by the Bank as per SEBI Listing Regulations, 2015, Companies Act, 2013 and Rules made there under alongwith Certificate of Compliance issued by the Secretarial Auditor is furnished separately which forms part of this Report.

MANAGEMENT DISCUSSION & ANALYSIS

A detailed Management Discussion and Analysis Report for the year under review as stipulated in SEBI Listing Regulations, 2015 is presented as a separate section forming a part of this Report.

Conservation of Energy and Technology Absorption

In respect of the nature of activities carried out by the Bank, w.r.t. the provisions of Section 134 (m) of the Companies Act, 2013 relating to conservation of energy and technology absorption, the Bank has taken every effort to conserve energy. The Bank has installed energy efficient equipments at all its branches including installation of Solar panels wherever feasible and power saving LED bulbs at majority of Branches and Central Office. The members may refer the Business Responsibility and Sustainability Report for more details on this aspect.

On the technological front, the Bank continued to offer reliable and secure banking service to its customers by providing the latest customer friendly technological solutions. A separate para on Technology matters has been set out elsewhere in this Report.

Foreign Exchange Business

The Bank continues to encourage country's export promotion by lending to exporters and offering them forex transaction facilities. The Bank also offers necessary foreign exchange transaction facilities to all users having underlying forex exposures.

DISCLOSURES UNDER SECTION 197 OF THE COMPANIES ACT, 2013

The disclosures pursuant to the provisions of Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are furnished as Annexure V.

In terms of Section 197(12) of the Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of limits set out in said rules forms a part of this Report.

In accordance with the provisions of Section 136(1) of the Act, the Integrated Annual Report excluding the aforesaid information, is being sent to the members of the Bank and others entitled thereto. The said information is available for inspection by the Members at the Registered Office of the Bank during business hours up to the date of the ensuing AGM. Any member interested in obtaining a copy thereof, may write to the Company Secretary of the Bank at its registered office or email at shares@cityunionbank.in

Disclosure under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Bank has a policy on Prevention of Sexual Harassment at Workplace, which provides protection for Women employees working in the organization. An Internal Complaint Committee 'ICC' has been set up to redress the complaints received under Sexual Harassment. ICC has reported the details of complaints, for the Financial Year as follows:

Whistle Blower / Vigil Mechanism

Pursuant to the provisions of Section 177(9) and (10) of the Companies Act, 2013, a vigil mechanism for Directors and employees to report genuine concerns has been established. The Bank has a policy on Whistle Blower / Vigil Mechanism which is uploaded in the website of the Bank. Weblink:

https://www.cityunionbank.bank.in/filemanager/Jun25/WHISTLE_BLOWER_POLICY_2025.pdf

There exists an online forum for all employees in the intranet server of the Bank to report genuine concerns under the mechanism. During the reporting period there was an opening balance of 1 complaint and 13 complaints were received during the year under this mechanism. All the 14 cases had been disposed off. As on March 31, 2026 there were no pending complaints. The functioning of the mechanism is reviewed by the Audit Committee from time to time.

Compliance with Secretarial Standards and applicable laws

It is hereby confirmed that the Bank has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India (SS-1 and SS-2) relating to Meetings of the Board, its Committees and Shareholders. Further proper systems are in place to ensure compliance with all laws applicable to the Bank.

ACKNOWLEDGEMENT

The Board of Directors of the Bank would like to take this opportunity to thank all its Customers and Stakeholders and wish to place on record its sincere appreciation for the guidance, assistance and co-operation received from the Reserve Bank of India, SEBI, IRDAI, NABARD, NHB, SIDBI, EXIM BANK, ECGC, DICGC, NPCI, Stock Exchanges, Depositories, Integrated Registry Management Services Private Limited, Life Insurance Corporation of India and all other authorities.

Your Directors also place on record their deep sense of appreciation for the Bank's Executives, members of the Staff and all other employees for their unwavering commitment to serve the Bank to the best extent possible.