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City Union Bank reported a 48 per cent jump in net profits to Rs 51 crore for the fourth quarter ending March 31, 2011, compared with Rs 35 crore for the same period the previous year.
The bank's board has recommended a dividend of 85 paise for each Re 1 share (85 per cent) for the year 2010-11, compared with 75 paise in the previous year.
The higher profits have come from better net interest margin (the difference between the interest paid and earned). NIM rose to 3.64 per cent from 3.15 per cent because the bank was able to bring down the cost of deposits steeper than the yield on advances fell, the bank's Managing Director and CEO, Mr N. Kamakodi, told a press conference here on Friday.
Higher net worth
For the bank, 2010-11 was a milestone year as its net worth crossed the Rs 1,000-crore mark. Mr Kamakodi said that the bank would need to grow its net worth further to Rs 3,000 crore over the next 4-5 years, commensurate with the growth in advances (expected to reach Rs 30,000 crore in five years, from Rs 9,300 crore now).
To meet the net worth target, the bank will need about Rs 1,000 crore of external equity funding; it would raise the funds at the most opportune time, he said.
On the BSE, the shares of City Union Bank on Friday closed at Rs 43.75 up by 3.80 per cent.
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