 "City Union Bank Q3 net up 15.28%")
City Union Bank has reported a 15.28% growth in net profit for the quarter ended December 31, 2014 at Rs 102.70 crore from Rs 89.09 crore during the same period last year.
N Kamakodi, managing director and Chief executive officer of the Bank said that 25% growth in operating profit, 44% growth in total provisions, curtailment of NPAs and restructured assets were the primary reasons for the growth in profit.
"We have been conservative in credit expansion, decided not to get in large corporate accounts and large infrastructure," said Kamakodi.
Total income of the bank rose by 10.94% to Rs 782.28 crore from Rs 705.12 crore in the year-ago period.
During the quarter, net interest income rose by 6% to Rs 209.77 crore and net interest margin stood at 3.48%.
Total deposits rose by 10% to Rs 23,203 crore from Rs 21,116 crore, advances up by 7% to Rs 16,968 crore from Rs 15,825 core in the corresponding quarter last fiscal.
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Bank's provisions towards NPAs rose by 44% to Rs 65.6 crore from Rs 45 crore.
The bank said recovery was Rs 37 crore in the quarter as compared to Rs 59 crore earlier. "Recovery is getting difficult due to the real estate market, which has slowed down," said Kamakodi.
The bank, which has an exposure of around Rs 100 crore to troubled airline SpiceJet, said there were no problems with the airline's account.
"There is no problem, things are going as usual and there no overdues and no delays, so there is no question of NPA," said Kamakodi.
The bank, which took a conscious decision to not lend to large corporates after 2007-2008, decided to lend to Spicejet, considering the Sun Group has been associated with the bank for over two decades.
"Their deposits with us is many times compared to our exposure," said Kamakodi, who refused to share absolute numbers.
He added that there is also enough collateral, by the way of immovable security. The new management has not approached us on the loan account, he added.