RETAIL BANKING | Cesar Tordesillas, India

City Union Bank eyes up to 30% growth

City Union Bank hopes to register a 20-30 percent growth this fiscal amid challenging times.

"We hope to maintain a growth rate between 20-30 per cent this year. At the beginning of last fiscal we thought
the economic condition would improve during the first two quarters of the current fiscal. But going by the
current trend we think the economy would hit the growth path during the beginning of the next financial year,"
said the the bank's managing director, N. Kamakodi.

Announcing the bank's annual results for the year 2011-12, Kamakodi said the net interest margin is expected to
go down by 10-20 basis points from the last year's level of 3.4 per cent.

For the 2011-2012 fiscal, the bank posted an after-tax profit of Rs.280.25 crore on a total income of Rs.1,903.90 crore, up from Rs.215.05 crore and Rs.1,219.41 crore logged during 2010-11.

The bank's total business was at Rs.28,563 crore as against Rs.22,243 crore done during 2010-11.

For the period under review, City Union Bank's net non-performing assets scame down to 0.44 per cent from 0.52
per cent as on March 31, 2011.

According to Kamakodi, the bank's profit is higher by Rs.10 crore last fiscal as the provisions towards doubtful debts came down to around Rs.57 crore from Rs.67 crore during fiscal 2010-11.

On the restructuring of advances, Kamakodi said the bank had restructured only six loan accounts last year
involving a total amount of Rs.38.63 crore.

"The overall restructured loan portfolio is around Rs.268 crore, down from Rs.533 crore three years before,"  Kamakodi said.

"Only Rs.13 crore has become bad out of our restructured accounts during the past three years. Ninety per cent
of our loan book is covered by collateral security," Kamakodi added.

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