Kumbakonam-based private sector lender City Union Bank has posted a 13% jump in its net profit to R112 crore for the fourth quarter ended March 2016, compared with R99 crore reported during the same quarter last fiscal.
The total income of the bank for the quarter stood at Rs 863.51 crore, against Rs 793.64 crore in the year-ago period, registering a growth of 8.8%.
N Kamakodi, MD and chief executive, said the bank has performed reasonably well given the prevailing economic scenario.
The bank was able to put up a consistent performance with steady increase in deposits, advances, net profit and net interest margin. The bank was also able to maintain its asset quality despite
the situation not being so conducive.
“Our growth came from SMEs, trading and agriculture segments. We could maintain asset quality because we avoided large consortium-based lending as well as exposure to the volatile infrastructure segment,” Kamakodi said.
Net interest income of the bank increased 22% to Rs 264 crore from Rs 205
crore, while net interest margin grew 3.96% from 3.40%.
Gross NPAs of the bank stood at R512 crore (2.41% of gross advances) while net NPAs stood at R323 crore (1.53% of net advances). The provision coverage ratio stood at 60%.
Deposits increased by 13% to R27,158 crore from R24,075 crore while advances were up by 17% to R21,253 crore from R18,089 crore. Total business of the bank grew 15% to R48,411 crore from R42,164 crore.
“The bank continues to build granularity and longevity in deposits demonstrated by CASA deposits growth which contributes to 19% as on March 31, 2016 on the back of strong current account deposits growth of 15% Y-o-Y. The bank is committed to building a strong retail franchise through continued investments in people, technology and digital infrastructure,” the chief executive said.
The RoA (return on assets) was almost flat at 1.46%, compared with 1.45% while the cost to income ratio reduced to 39.73% from 42.34%.
The bank which has a network of 525 branches and 1325 ATMs, plans to have 600 branches by March 2017.
Kamakodi said the bank’s capital adequacy as on March 31, 2016 as per Reserve Bank of India guidelines on Basel III norms was at 15.58% and tier-1 capital adequacy was 15.09%, well above regulatory requirements.
“For the next two years, we won’t need to raise any capital,” Kamakodi said.