City Union Bank eyes 16-17% growth in two years

February 24, 2024 08:11 pm | Updated 08:56 pm IST - CHENNAI

City Union Bank MD & CEO N. Kamakodi says that in the current fiscal would see a high single growth rate against earlier target of 12-14%.

City Union Bank MD & CEO N. Kamakodi says that in the current fiscal would see a high single growth rate against earlier target of 12-14%. | Photo Credit: Special Arrangement

City Union Bank Ltd. (CUB) is betting big on the newly introduced digital lending to achieve 16-17% credit growth rate over the next two years, said MD & CEO N. Kamakodi.

“My focus in the next four to eight quarters will be to reach growth rate of about 16-17% so that it increases return on equity and plough back profit to take care of our growth,” he said in an interview.

The private sector lender is likely to end the current fiscal with a high single-digit credit growth against its earlier target of 12-14%, due to stoppage of Kissan Credit Card agri gold loan following regulatory observation and divergence issue last year.

“Due to these disturbances, our daily average advance growth started reducing from 12-14% in December 2022 to 3-4% till September 2023.,” he said. “We started the digital lending practices. Things are settling down and this process should support this growth,” the CEO added.

According to him, since November, the bank was able to see monthly credit growth of 1%, or more than ₹400 crore, that translates into restoring 12-14% on an annualised basis going forward.

At the beginning of FY24, CUB said it was aiming at 12-15% credit growth, accelerating proper implementation of the digital lending process, ending the fiscal with a decent net profit growth, bringing down slippages to pre-COVID levels and strengthening the leadership team to make organisation future ready.

“We are by and large progressing on these lines, except on the growth, which is also just started seeing a positive trend. All the other factors have settled well,” he said.

Asserting that recoveries are more than the slippages, he said that they were able to see decent growth in net profit because of reduced credit cost. Hence, going forward, the bank is on the right track of getting back to pre-COVID level of non-performing assets.

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