Private sector City Union Bank expects significant growth in the income contributed from the insurance vertical during the current financial year, a top official has said. The Tamil Nadu-based bank was on track to reach pre-Covid level in slippages and recovery, the bank’s Chairman and Managing Director and CEO N Kamakodi said.
“As we have onboarded six insurance companies covering life, general, and non-life during FY’23, our insurance income contribution has also doubled to Rs 55 crore in FY’24 as compared to Rs 27 crore in FY’23,” he said.
“We expect significant growth in insurance income in the current financial year,” he told analysts in an earnings call.
On the outlook, Kamakodi said the bank opened its 800th branch in Ayodhya last financial year and this year has planned to open about 50-75 branches.
The digital lending process targeted to serve the micro, small, and medium enterprises segment was also reaching the ‘last leg’ and should be launched before mid-June, he said.
The digital lending process would help the bank achieve improved credit growth in the coming quarters, he said and added that the initiative would be expanded into secured retail lending segments like housing.
On the financial performance, Kamakodi said the bank achieved two historical landmarks by crossing Rs 1 lakh crore in total business and also crossed Rs 1,000 crore in PAT (profit after tax).
“NPA slippages have come down significantly and recovery has surpassed the slippages. Going forward, we are on the right track to reach pre-COVID level slippages and recovery,” he said.
The total business of the bank stood at Rs 1,02,138 crore for FY2024 registering a growth of 6 per cent compared to Rs 96,369 crore registered last year.
The implementation of digital lending coupled with the addition of senior management team is auguring well for our future business growth, he said.
For the year ending March 31, 2024, the profit after tax stood at Rs 1,016 crore, as compared to Rs 937 crore, up by 6 per cent.
Improved recovery resulting in lower provisioning requirements had helped to achieve PAT growth, the bank said.
Total deposits of the bank as of March 31, 2024, stood at Rs 55,657 crore while advances were at Rs 46,418 crore.
The Net Interest Margin (NIM) was at 3.66 per cent for the quarter ending March 31, 2024, while for the year ending March 31, 2024, it was at 3.65 per cent within the guidance levels, he said.
The Return on Assets (RoA) for Q4 FY24 is 1.48 per cent and for the financial year 2024 stood at 1.52 per cent which is the long-term average, the bank said.
