City Union Bank Ltd. (CUB) said it had started working towards achieving a credit growth of more than 15% for the current fiscal as it has been meeting all its set parameters.
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“We have already started taking things in that direction. The results will be seen by the fourth quarter,” said MD & CEO N. Kamakodi.
The lender had posted 12% growth in the last quarter and performance was on the expected lines, he said, adding, “We have slowly started pushing to accelerate growth to 15-18% for FY23, and the growth will be back as usual.”
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On constraints, he said it could be macro economic factors such as extended war, oil price and inflation among others.
“But if things don’t deteriorate further from wherever we are and they come back to the normalcy, maybe in the next six months or so, I think things should be positive going forward,” he added.
In an earnings call, Mr. Kamakodi said that the overall slippages had come down and recoveries were improving. “So, going forward, it should result in a significant reduction in the gross and net non-performing assets.”
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On the dues from low-cost carrier SpiceJet, he said the management had started to settle the dues in a phased manner as per the agreed time schedule.
Till October 22, SpiceJet had repaid ₹17.5 crore and the current outstanding was ₹82.5 crore. The last instalment was due on June 23.
Pointing out that there was a small dip in the capital adequacy ratio of the bank to 20.08% against 20.48% in the first quarter, he said it was primarily due to increased contribution from non-gold loan portfolio.
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“Even during the COVID period, we were one of the few banks who could pass through the crisis without going for augmentation of fresh infusion of capital. And last time, we had raised the funds was during July 2014 through QIP route to the tune of ₹350 crore,” he said.
The private sector lender reported the highest ever net profit of ₹276 crore for the second quarter ended September and it was for the past three quarters on a continuous basis, it had crossed the ₹200-crore mark.
For the half year ended, the net profit was ₹502 crore. Again, this was the highest in the bank’s history, Mr. Kamakodi said.
Net interest margin stood at 4.09% and for the first half at 4.02%. CUB expects it to stay around the current level plus or minus 10-20 basis points.
The bank plans to open add 50-75 branches in various states towards the year end.