City Union Bank post 10% increase in Q1 net profit

The bank had reported net profit of Rs 90.29 crore during the corresponding period a year ago

City Union Bank today reported a 10.1% increase in its net profit for the first quarter, ending June 30, 2014 at Rs 99.49 crore.

The Tamil Nadu-based private sector bank had reported net profit of Rs 90.29 crore during the corresponding period a year ago.

Total income of the bank for the quarter rose to Rs 754.03 crore from Rs 702.88 crore in Q1 of last year, City Union Bank Managing Director and CEO N Kamakodi told reporters here.

He said the net profit has grown by 10.1% for the quarter and expected that the bank's growth to be on similar lines during rest of the current financial year.

"As you all know, last couple of years have been difficult for the entire banking industry in terms of growth and asset quality. Since we did not focus on infrastructure and consortium, we were reasonably okay in our asset qualities. So ultimately, our Profit after tax has grown by 10.1% for the quarter (ending June 30, 2014)," he said.

"Going forward, we are hopeful of achieving 10-12% growth. That growth will happen end of the fourth quarter," he said.

Noting that the Net NPA of the bank increased to 1.28% for the quarter ending June 30, 2014 from 0.63% as on June 30, 2013, he said there was a slippage of about Rs 317 crore during the quarter, of which Rs 310 crore was asset quality leading to the increase in Net NPA.

Referring to the raising of funds through QIP, he said it had been completed this year. "The issue was to raise Rs 350 crore and it got oversubscribed by 3.38 times aggregating to Rs 1,181.39 crore," he said.

"Now do not need immediate capital. Second tranche will happen may be after a year...," he said.

On expansion plans, he said the bank had opened one branch during the quarter ending June 30, 2014 and by this year end it plans to open 500 branches in the country.