The slippage ratio is also on a downward trend and expect it to range between 1-1.5% in 1-2 years, said N Kamakodi, MD CEO, City Union Bank.
City Union Bank is on the radar after Motilal Oswal Securities named it as one of their 'next trillion dollar opportunities'.
In an interview to CNBC-TV18, N Kamakodi, MD CEO, City Union Bank shares the outlook for 2018.
As guided earlier, the bank expects the loan book to grow between 15-18 percent in FY18 and between 18-20 percent in FY19, said Kamakodi.
With regards to net interest margins, he said for the past 50 quarters their margins have remained in the range of 3.5 to 3.7 percent but in the last few quarters it has been in the range of above 4 percent due to non-participation of PSU banks.
So, going forward they are expected to contract because typically, in a lower interest rate cycle, margins contract and in a higher interest rate cycle they expand but as of now they are high.
He said, fortunately the bank has no had exposure to large ticket corporate loans and have exposure to one NCLT case, which has been recognized and fully provided for.Moreover, the slippage ratio is also on a downward trend with bulky issues in NPAs now over. So expect the ratio between 1-1.5 percent over next 1-2 years.