The Hindu Business Line : City Union Bank profit rises 42% at Rs 102 cr

Chennai, May 23 Concentrating on its core business without compromising on margins helped City Union Bank (CUB) post a 42 per cent increase in profits at Rs 102 crore for the fiscal ended March 31, Mr S. Balasubramanian, Chairman, said today. He said the bank had given a consistent performance on all parameters and its fee-based income had also grown to Rs 62 crore from Rs 38 crore in 2006-07.

Mr Balasubramanian said the bank was planning a joint venture with Hatton National Bank of Sri Lanka for merchant banking business. Mr Kamakodi, Executive Director, said that the proposed joint venture intended to serve the small and medium enterprise sector (companies with a turnover of say Rs 50 crore to Rs 100 crore) and help them access international capital. The business would initially start in south India after receiving necessary regulatory approvals, he said. Asked about why CUB had chosen to partner a bank from Sri Lanka, Mr Balasubramanian explained that the bank had investment expertise, had a heritage spanning 120 years and was listed in Europe. Importantly, there would be no conflict of interests, which might have been the case if a local partner had been chosen, he said.

Biz volume

Mr Kamakodi said that the bank had planned to reach a business volume of Rs 15,000 crore in this fiscal (Rs 9,000 crore of deposits and Rs 6,000 crore of loans).

He said the bank had opened 26 branches last year and expects to open 42 branches in the current fiscal. On further capital raising plans, Mr Kamakodi said the bank would require about Rs 250 – 300 crore during the next two to three years. It would decide on the timing depending on market conditions.

The bank is in discussion with some Qualified Institutional Buyers and is keeping all options open, he said.

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