City Union Bank (CUB) has reported 12 per cent growth in net profit at ₹127 crore for the quarter ended December 31, 2016 as against ₹113 crore in a year-ago period, on the back of robust growth in operating profit.

CUB’s operating profit grew 32 per cent to ₹274 crore when compared with ₹207 crore, aided by rise in net interest income, which went up 21 per cent to ₹307 crore from ₹ 253 crore in Q3 of the previous fiscal.

However, provisions and contingencies were higher by 57 per cent at ₹147 crore (₹94 crore in the year-ago period).

Advances grew 13 per cent to ₹21,801 crore (₹19,376 crore as of December 31, 2016), while total deposits went up 16 per cent to ₹29,986 crore (₹25,959 crore).

“In a quarter that had effects of demonetisation, our performance was decent when compared with industry standards,” N Kamakodi, Managing Director and Chief Executive Officer of the bank, said here.

Slow recoveries

But, it was not a good quarter in terms of recoveries due to the currency ban. As against average recoveries/upgradations of ₹40-45 crore per quarter, CUB could recover only ₹20 crore in Q3.

With fresh slippages of ₹118 crore in the December quarter, the gross NPA went up to 2.98 per cent from 2.37 per cent in a year ago period, while net NPA increased to 1.72 per cent from 1.49 per cent.

The provision coverage ratio stood at 62 per cent as of December 31, 2016.

The bank’s return on assets stood at 1.50 per cent.

The bank also announced two digital banking initiatives — selfie banking, meant for opening an account, and UPI (unified Payment Interface) link.

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