City Union Bank Ltd. (CUB) for the first time is likely to cross the ₹1,000 crore mark in its net profit during the current fiscal, said its MD and CEO N. Kamakodi.
“We closed the first half with a net profit of ₹508 crore and hope to cross four-digit mark for the first time during this fiscal,” he said during an interaction.
“The bank hopes to achieve this figure despite the headwinds in the operating profit. This may be due to the positive contribution from the credit cost,” he said.
According to him, the current quarter is the highest-ever profit the bank had declared in its 120-year history. During FY23, CUB had posted a net profit of ₹937 crore.
Regarding the slippages, he said it has come down to 2.06% of closing advances, almost equal to pre-COVID level. For the first time in the recent past, live recovery surpassed the live slippages and this trend is expected to continue.
Net non-performing assets (NPAs) have come down below the ₹1,000 crore mark after many quarters, and SMA2 numbers to total advances stood at 2.05% against 2.45% in Q1.
The private sector lender is also looking at getting its net NPA to the pre-COVID level of 1.5%-2% first and then between 1% and 1.5% in the next few quarters.
Mr. Kamakodi informed that the bank commenced the soft launch of digital lending products that would help it to achieve credit growth of 10% for FY24. The project is executed by Newgen Software team and coordinated by BCG.
Under the digital lending process, CUB started MSME lending below ₹3 crore in a few select branches. By the second half of November, it would be extended to all other branches and enhance MSME lending to ₹5 crore, followed by retail lending and renewals.
By the end of January, at least 50% to 60% of the products should be into full production throttle and the remaining one-third may be in soft launch or they should have also started giving results, he said.
Published - November 14, 2023 08:16 pm IST
