CUB leaps forward
By Venkatachari Jagannathan | 29 Jun 2006
Chennai: The City Union Bank Limited (CUB) has reported stronger performance last fiscal than the seven other old private banks.
The Kumbakonam-based CUB compares favourably top in terms of net interest income growth with the other old private banks. During FY 2006 the bank's net interest income was Rs139.79 crore - a growth of 26.13 per cent over FY 2005 while its operating expenses as a percentage of net interest income was 56.85 per cent, making it the lowest amongst several old private banks. CUB also posted the highest growth percentage in the operating profit over many others.
In bancassurance, CUB has done commendably well last fiscal. The bank earned a first year commission income of Rs11 crore selling 1,600 policies of the country's premier life insurer, the Life Insurance Corporation of India (LIC). The total premium brought in by the bank for the insurer is Rs39.36 crore.
During FY 2006, CUB posted a total income of Rs184.14 crore and an after tax profit of Rs56.37 crore. The operating profit showed a steep increase to Rs109.15 crore. For FY 2005 the figures were Rs144.27 crore, Rs46.32 crore and Rs81.67 crore respectively.
The bank's advances portfolio grew by 26.68 per cent to Rs2,550 crore and the deposits by 13.67 per cent to Rs3,518 crore. The year also saw the bank strengthening its Tier II debt by raising Rs30 crore unsecured loan of 10-year tenure.
The bank has drawn up ambitious growth plans. Says
S Balasubramanian, chairman and CEO, "Our total business (advances plus deposits) target for this fiscal is Rs10,000 crore. We will be increasing our branches to 170 by adding 24 new ones." A predominantly Tamil Nadu-based bank, CUB is now branching out to other parts of the country. Nearly two-thirds of the new branches will be in the Western region (Maharashtra and Gujarat) and the remaining in the four Southern states and Punjab.