Kumbakonam-based private sector lender City Union Bank (CUB) on Wednesday said it expects FY20 slippages to be in-line with earlier guidance of 2-2.5 percent after it posted 8.04 percent rise in net profit at Rs 192.43 crore for the quarter ended December 31, 2019.
In an interview to CNBC-TV18, N Kamakodi, managing director and chief executive officer, said that the growth rate of the banking sector has come down in the last three quarters.
"At the beginning of the year, we guided for a growth rate at the north of 15 percent, whereas the industry growth rate recorded at that point of time was about 13 percent. However, over the period of last three quarters, the growth rate of the system has come down to about 7 percent and in that, the bank has about 3-5 percent over and above the growth rate of the system which we have maintained,” he added.
“On slippage ratio, it’s about Rs 220 crore odd which is also almost in line with whatever we have guided. In terms of the percentage, we have guided about 2-2.25 percent slippage in the past and it’s about 10-15 percent over and above that and both slippage and growth numbers are in line with the expectations whatever we have shared in the past," Kamakodi said.
On gross NPA front, he said, “The bank has consistently recorded in terms of all the numbers. The net non-performing assets (NPA) is above 1.9 percent for the last 2-3 quarters and the sequential improvement is about 4 bps and quarterly increase in gross NPA is only to that extent. We expect, with plus-minus, 10 bps for the next 2-3 quarters," he added.