CHENNAI: City Union Bank first-quarter profit rose 10.7% year-over-year to Rs 123.52 crore as the private lender saw its total income rise on higher net interest income.
Sequentially, the bank saw a 10% rise in profit after tax (PAT) in the first quarter, compared to Rs 112.23 crore in the fourth quarter of FY15. Total income at the bank rose 9% to Rs 883.30 crore. The bank saw its interest income from advances and bills rise 9.3% to Rs 772.20 crore. CUB also profited on its investments; with its first-quarter income up 10.7% to Rs 63.39 crore, compared to the year-ago quarter.
The lender’s net interest income (NII) – the difference between revenue earned from loans and the cost of servicing deposits – rose by 25% to Rs 280.02 crore. Net interest margin (NIM) for the quarter increased to 4.07% and return on assets at 1.55%. The bank’s total deposits increased 11% to Rs 27,936 crore and gross advances went up by 19% to Rs 21,216 crore.
While CUB’s capital adequacy ratio at 15.25% is more than adequate, the bank’s non-performing assets (NPAs) rose 54% to Rs 555.03 crore. Net NPAs rose 42.5% to Rs 333.98 crore. Gross NPAs as percentage of advances widened to 2.62% from 2.01% in the year-ago. Net NPAs increased to 1.59% from 1.32%. Provision against contingencies was jacked up by 56% to Rs 70.74 crore.
“Given the economic slowdown generally prevailing in the country, our bank’s performance is notable. The bank was able to put up consistent performance with steady increase in deposits, advances, NII, PAT and NIM,” said N Kamakodi, MD & CEO, City Union Bank.