City Union Bank gears up for digital expansion and robust loan growth in FY24
In an interview with CNBC-TV18, N Kamakodi, the Managing Director and CEO of City Union Bank, shared strategic insights on the bank's ambitious loan growth and digital lending plans for the year.
City Union Bank is all set to achieve double-digit loan growth and a comprehensive digital transformation soon. The bank plans to extend its digital lending processes to all branches by the end of this year, a move that aligns with its strategic growth objectives.
In a conversation with CNBC-TV18, N Kamakodi, the Managing Director and CEO of City Union Bank emphasised the bank's focus on asset quality over profitability, especially in the post-COVID era.
"During the COVID period, we deliberately scaled back our growth initiatives and concentrated on rectifying asset quality concerns. Our emphasis was primarily on gold loans and loans under the Emergency Credit Line Guarantee Scheme (ECLGS)," Kamakodi stated.
Kamakodi remains optimistic about the bank's growth prospects in the second half of the fiscal year. However, he noted that the investment cycle in the Micro, Small, and Medium Enterprises (MSME) sector is still catching up.
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The Tamil Nadu-headquartered bank's recent financial performance reflects a cautious yet steady growth path. In the second quarter of FY24, City Union Bank reported deposits of ₹52,714 crore, a 5.7% year-on-year (YoY) increase, and a 2.05% quarter-on-quarter (QoQ) growth. The Current and Savings Account (CASA) balance stood at ₹15,590.3 crore, marking a slight YoY increase. The CASA ratio was at 29.58%, a slight dip from the previous year.
Advances for the quarter reached ₹43,688 crore, indicating a 4.24% YoY rise. The Credit-Deposit (CD) ratio stood at 82.9%, down from 84% last year. Notably, the bank has managed to reduce its slippages significantly, with the annualised slippage ratio dropping to 2.06%.
The bank's stock closed over 2% higher at ₹147 apiece on the NSE on November 16. It has gained nearly 6% over the last month versus a flat Nifty 50.
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(Edited by : Shweta Mungre)
First Published: Nov 16, 2023 8:15 PM IST
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