Chennai: City Union Bank (CUB) increased its operating profit by 15 per cent to Rs 338 crore from Rs 294 in the corresponding period last year, and its net profit increased by 15 per cent to Rs 175 crore during the fourth quarter of the financial year ended 31 March.
Managing director and CEO, CUB, N Kamakodi, speaking with News Today said the growth came courtesy of the bank’s firm grip over asset quality. He said this while the bank announced its financial performance here in the city on Friday.
“The consistent growth of both deposits and advances and having tight control over the asset quality has helped us consistently grow in terms of profitability and we will be following the same strategy to increase profitability for the following financial year of 2019-20,” said Kamakodi.
He added that not indulging in large corporate and consortium loans has helped the bank stabilise the core performance for making steady progress consistently, hinting at the struggles that industry is facing upon IL&FS debacle.
Kamakodi said, “As the bank didn’t involve itself with the infrastructure sector, we were able to reach our goals. You can see that many banks are in firefight mode as they are trying to clear off non-performing assets as a result of lending to the infrastructure sector. Also, even without pitching to the corporate sector, we were able to perform well.”
When quizzed about the bank’s digital performance, the MD of the bank said, “Over 90 per cent transactions take place through digital channels and customers are happy to have all the repetitive and daily transactions digitally through ATMs and net banking. Most of our branches posess cash depositors. With these alternate digital channels, we take care of the customers’ requirements.”
With the elections results due, Kamakodi said he does not expect any major impact on the profitability or the performance of the bank, whatever the result may be.
On the bank’s future endeavours, he expects the bank to make a profit of about 18-20 per cent higher in the FY20 and stated that they have planned to start over 50 branches and close to 100 ATMs across the nation.
On enquiry of the bank’s support towards agriculture, the CEO assures that the bank has been providing loans to farmers as demanded by the Government. ‘We continue to focus on SMEs and agriculture as these sectors constitute about 75 per cent of our loan book,’ he said.
| Numbers game |
| In the quarter, the bank saw its net interest income increased by 14 per cent to Rs 421 crore from Rs 368 crore while its net interest margin stood at 4.40 per cent. The bank’s deposits increased by 17 per cent from Rs 32,853 crore to Rs 38,448 crore, while their advances grew by 17 per cent from Rs 28,238 crore to Rs 33,065 crore. |
| Expanding network |
| The bank has 650 branches and 1,685 ATMs as on 31 March. Last year, about 50 to 60 ATMs were either shut down or shifted to other strategic locations, stated bank officials. When asked if the bank is planning to diversify into blockchains, Kamakodi said, “We are looking into it.” |
The story has inputs from Harikrishna S.