N Kamakodi, MD & CEO, City Union Bank in an interview with CNBC-TV18 spoke about the performance of the bank and the road ahead. He said, "I do not expect major change in the margins. We always keep an average net interest margin a 3.3% and the range grows between 3% to 3.8%."
N Kamakodi, MD & CEO, City Union Bank in an interview with CNBC-TV18 spoke about the performance of the company and the road ahead.
He said, "I do not expect major change in the margin. We always keep an average net interest margins a 3.3% and the range grows between 3% to 3.8%."
"We closed the financial year 2010-11 with about 25-26% growth in deposit and 35% growth in advances. This year the overall advances growth should be between 25% to 30% and overall business growth range of between 28% to 30%," he added. The bank is also planning to garner Rs 1,000 crore in the next three years to fuel growth.
Below is the verbatim transcript of his interview with Latha Venkatesh and Gautam Broker of CNBC-TV18. Also watch the accompanying video.
Q: What is your outlook on the margins? Do you think they could be under pressure given that RBI is likely to hike rates further?
A: I do not expect major change in the margins. As a whole, we always keep an average net interest margin a 3.3% and the range grows between 3% to 3.8%. So we are fairly closer to the middle one. There could the minor aberrations to the mid-point but we keep things going.
Q: What exactly is your net interest margin in the fourth quarter and for the full year?
A: We had net interest margin for the whole year at 3.64% and the margin for the fourth quarter is at 3.79%.
Q: In the fourth quarter you have improved on your margins because third quarter you gave us a number of 3.48 will the current be more tough, it could go down from 3.7 this quarter?
A: I do not expect major variations from the current levels. This is because we fined tuned the base rate only in the month of January and also recently in mid-May. So we feel whatever the increase in the cost will be compensated by the increase in yield because of the increase in base rate. We hope to maintain the same thing as we move forward.
Also Read: See over 20-21% loan growth ahead: HDFC Bank
Q: What about fund raising. We understand that you are looking at a QIP rights issue is that in progress?
A: We normally make our plan for the period of at least three-five year horizon. Our plan is that we have to increase the total business to about Rs 55 to Rs 60 crore in 2015. We will be requiring about Rs 3,000 crore of funds to support the capital adequacy ratio. We have just achieved the milestone of crossing Rs 1,000 crore.
We will be having about Rs 1,000 crore of profits and we have to raise Rs 1000 crore over a period of next three years. In that how much will be through rights, QIP and preferential allotment we have to take a call as we move forward.
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