Money & Bankings

Published: Dec 29, 2021
Updated: Dec 29, 2021

City Union Bank

Targeting Rs 100,000-crore business mark in a couple of years

Though the Covid-19 pandemic has slowed the pace of growth of Tamil Nadu-based City Union Bank (CUB) – the oldest private sector bank in the country operating for over a century — the Kumbakonam-headquartered banking entity is all set to re-enter the growth path from the current fiscal ending March 2022, and within a couple of years expects to cross the Rs 100,000-crore business mark. The total business during fiscal 2021 amounted to Rs 81,558 crore, with deposits contributing Rs 44,537 crore and advances contributing Rs 37,021 crore.

An optimist as well as realist, Managing Director and CEO Dr N Kamakoti hopes that fiscal 2022 will not be as bad as fiscal 2021, quipping that the credit growth in the current fiscal could be a mid-to-high single digit if the economic environment behaves like last year. Though the impact of the second wave of Covid-19 which hit fiscal 2021 was detrimental in terms of infections and mortality, it did not impact the bank’s growth to a great extent. “I do not say that we will be seeing milk and honey flowing but it certainly looks like now things are may not be as bad as it when the first wave led to widespread lockdowns. In short, the worst seems to be over and fiscal 2022 will be better than the previous year,” he says.

Analysing the bank’s performance during fiscal 2021, Dr Kamakoti reveals that during the pandemic year, credit growth was around 7 per cent, which came mainly from gold loans and extension of facilities to ECLGS (Emergency Credit Line Guarantee Scheme). Under ECLGS 1, 2 and 3, the bank disbursed Rs 2,096 crore for an exposure of Rs 10,445 crore, constituting about 5.63 per cent of the advances during the year.

Says an elated Dr Kamakoti, “We expect a further sanction of about Rs 200 crore from ECLGS 3. The government guaranteed schemes 1, 2 and 3. In fact, most of the credit of MSMEs and also non-MSMEs and businesses has started generating a surplus. This has also resulted in improving the capital adequacy ratio as the disbursement to ECLGS attracts risk weight and is guaranteed by the government.”

100-YEAR HISTORY

CUB, originally promoted as Kombakonam Bank back in 1904, has made remarkable progress during the last 117 years. Starting as a regional bank in Thanjavur district, it steadily built for itself a place in other parts of Tamil Nadu. It started growing through the organic (by opening new branches) and inorganic (acquisition of existing banks) routes. In 1957, it acquired the assets and liabilities of Common Wealth Bank. In 1965, it acquired two more banks – City Forward Bank and Union Bank. Having opened branches all over Tamil Nadu, the bank started moving out of the state and opened a branch in Bengaluru in 1980 and in the twin cities of Hyderabad-Secunderabad in Andhra Pradesh. The name of the bank was changed to City Union Bank, adding the names of banks acquired earlier. Subsequently, it went pan-national, and today covers almost all banking activities along with businesses in related fields.

Today, CUB has emerged as a full-fledged private sector national banking entity with 702 branches and 1,724 ATMs across the country. And it expects business to reach the Rs 100,000-crore mark within a couple of years.

Prospects for fiscal 2022 are expected to be better than in fiscal 2021 and the bank will re-enter the path of sustained growth from fiscal 2023, experts feel.