City Union Bank (CUB) has reported a net profit of Rs 140.32 crore during the quarter ended June 30, 2017, as compared to Rs 123.52 crore, a year ago, an increase of 14%. The bank is planning to seek shareholders approval for a Rs 500-crore Qualified Institutional Placement (QIP).
N Kamakodi, managing director and chief executive CUB said that the quarter performance was decent and it was satisfactory compared to peers and industry.
He attributed the increase in profit to 22% growth in net interest margin and increase in credit.
The total income of the bank rose to Rs 960.86 crore from Rs 883.30 crore, a year ago.
The bank's capital adequacy ratio (CAR) as on June 30, 2017 as per RBI guidelines on Basel III norms is 15.87% and Tier I capital adequacy was 15.04%, well above regulatory requirements. The CUB's provision coverage was 62%.
He added slippages has been coming down consistently over the last few years. Last year, it dropped to 1.99% from 2.35%.
This year the bank expects this will be dropped to 1.75%.
Speaking about the QIP, he said, the bank is seeking shareholders approval to raise Rs 500 crore through QIP.
"It is an enabling resolution and we will raise the money based on need and opportunity, " said Kamakodi.
The bank had the total business of Rs 54,256 crore as of June 30, 2017. CUB set a target to grow by 15-18% by end of March 2018.