City Union Bank core has seen good growth in core income this quarter. The gross NPA has come down from 1.23 percent to 1.13 percent, while the gross number has come down from Rs 178.74 crore to Rs 173.10 crore.
City Union Bank's core income growth was healthy both on net interest income (NII) and operating profit front says MD & CEO N Kamakodi. Speaking to CNBC-TV18 about the financial performance of the bank, he pointed out that Q4 profit after tax (PAT) increased by 15 percent from Rs 71.98 crore to Rs 82.49 crore, on a year on year basis.
Comparing the last quarter of the previous fiscal with the corresponding quarter of this one, operating profit increased by 31 percent from Rs 114.23 crore to Rs 149.68 crore this year. NII for Q4 rose 27 percent from Rs 136.65 crore to Rs 173.31 crore, he added.
Here is the edited transcript of his interview with CNBC-TV18.
Q: Could you give us your numbers. We still do not have those on the net interest income (NII), as well as the profitability front as well as on the asset quality?
A: Between Q4 of the previous fiscal and Q4 of this one, our operating profit increased by 31 percent from Rs 114.23 crore last year to Rs 149.68 crore this year.
The profit after tax (PAT) for Q4 has increased by 15 percent from Rs 71.98 crore to Rs 82.49 crore. Looking at the year as a whole, the operating profit has shown a growth of Rs 427 crore to Rs 523 crore, which is about 23 percent up. The net profit has also grown by 15 percent from Rs 280 crore to Rs 323 crore.
The NII for Q4 is increased by 27 percent from Rs 136.65 crore to Rs 173.31 crore. For the year as a whole it has once again shown 25 percent growth from Rs 499.15 crore to Rs 624.01 crore. It has been a good year for the core income growth both on NII and also on the operating profit side. PAT has grown by 15 percent both on quarter-on-quarter (Q-o-Q) and year-on-year (Y-o-Y).
Q: Could you also tell us the gross non-performing assets (NPA) number, in Q3 it was Rs 179 crore Q-o-Q, what is that number and also the NPA as a percentage by Q3 and it was 1.23 percent?
A: The gross NPA has come down from 1.23 percent to 1.13 percent while the gross number has come down from Rs 178.74 crore to Rs 173.10 crore. The net NPA on a sequential basis has maintained in the same figure of 0.63 as per Q3. Current year also that number is 0.63. On absolute return, it has increased marginally by Rs 5 crore by Rs 91.43 crore to Rs 96.40 crore.
Q: Could you tell us about the slippages as well if restructured assets if any?
A: The current restructured portfolio is about Rs 270 crore, which is nothing but about less than 2 percent of our total loan book and for Q4, the slippage was about Rs 67.96 crore including a lumpy account of about Rs 35 crore and the recovery by about Rs 21.51 crore. So year as a whole, we could end up with 1.13 percent gross NPA and 0.63 percent net NPA.
Q: What about the net interest margin (NIM) and what is the forecast for next year because you have fairly high NIM, last quarter at least was 3.45 percent?
A: Currently that number is about 3.35 percent or so. If you look into our performance for the last 15-20 quarters, we have always maintained an average net interest margin (NIM) of 3.3 while the range is between 3.1-3.2 to 3.6-3.7 percent. Currently, our NIM is fairly stable between 3.3 percent and 3.4 percent as per things are standing.
Simultaneously, if you look into the figures of return on assets, return on equity and all, the return on assets is about 1.53-1.6 percent and return on equity is above 22 percent. We have fairly maintained all the efficiency and profitability ratios and also maintained a decent growth while asset quality is also maintained similar to our December quarter. Overall the financial year despite the financial stress, we had decent performance for the financial year 2012-2013 and hope to maintain that for the current year also.