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City Union Bank reported a 10 per cent increase in net profit to ₹113 crore for the third quarter ended December 31, 2015, as against ₹103 crore for the same quarter last year. The bank had performed well in all parameters with significant increase in current account, savings account deposit and in safeguarding the asset quality.
The bank’s total business rose 13 per cent to ₹45,334 crore (₹40,171 crore in Q3 FY15).
The bank’s net non-performing asset, at ₹287 crore, was 1.49 per cent of the advances, said the bank’s Managing Director and CEO N Kamakodi.
The bank’s exposure to some problem sectors, such as infrastructure and power was less, resulting in reduced NPAs when compared to some of the public sector banks, he told newspersons.
Despite the challenging economic environment, “we managed to do well in business and profitability growth. We hope that things would get better going forward,” he said.
Kamakodi said that the bank had delivered a sustained financial performance driven by steady increase in net interest income (NII). This is in the backdrop of improvement in lending to SMEs/traders, increase in net interest margins (NIM), and overall preservation of asset quality.
The bank’s NII increased 21 per cent to ₹253 crore (₹210 crore) and the NIM rose to 3.82 per cent from 3.48 per cent a year ago.
Deposits, advances growth
Deposits increased 12 per cent to ₹25,959 crore (₹23,203 crore) and advances by 14 per cent to ₹19,374 crore (₹16,968 crore), he said.
Kamakodi said in the last 10 years, the bank has been annually growing at about 20 per cent. However, this moderated to nearly 10 per cent in the last two-three years. In the beginning of this financial year, the bank anticipated growth to be in the range of 12-15 per cent for this fiscal, and “we are on track to achieving it,” he said.
In 2016-17, the bank expects to grow 15-18 per cent, he said.
On the BSE, the bank’s scrip closed at ₹83, down 0.06 per cent.
500th branch
Kamakodi said that on February 22 the bank will inaugurate its 500th branch at Chinatamani, 12 km from Kumbakonam, Tamil Nadu, where the bank’s headquarters is located. Under Corporate Social Responsibility, the bank has so far spent ₹7.82 crore.
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