Our Bureau

Chennai, Nov. 8

CITY Union Bank (CUB) has reported a net profit of Rs 12.44 crore for the second quarter of the current year, 35 per cent higher than Rs 9.21 crore in the corresponding period of last year. This has been achieved despite the provisions doubling to Rs 11.9 crore, from Rs 6 crore.

Addressing a press conference here today, the CUB Chairman, Mr S. Balasubramanian, said the bank intended to add 16 more branches in the current year to its existing network of 125 branches.

Mr Balasubramanian said the bank today joined the National Financial Switch, through which its ATM cards can be used at 5,170 ATMs of 15 other banks across the country.

Mr N. Kamakodi, General Manager, said the higher provisioning meant the bank might not have to provide any more in the second half of the current year.

He said the bank's investment book of around Rs 1,000 crore was well insulated against interest rate increases. As much as 80 per cent of the investments are in the held-to-maturity category.

The rest of the investments are also not very sensitive to interest rate rises.

Mr Kamakodi said an 80-basis point increase in the benchmark 10-year G-sec yield would cause a depreciation of Rs 1 crore to the bank's non-HTM portfolio.

(This article was published in the Business Line print edition dated November 9, 2005)
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