In a strong performance reflecting operational turnaround and strategic alignment with industry trends, City Union Bank (CUB), one of the oldest private sector banks, announced that it achieved double-digit credit growth in all four quarters of FY25. This is the first time since FY19 and notably post-covid, that the bank has maintained consistent quarterly double-digit credit growth. The bank’s profit after tax (PAT) increased by 11 per cent to Rs 1,124 crore for FY25. For Q4, PAT grew by 13 per cent to Rs 288 crore. The 14 per cent growth in credit, at Rs 53,066 crore, was driven primarily by the MSME core business and gold loans, aligning the bank’s trajectory with broader industry benchmarks, said N Kamakodi, MD and CEO. The bank recorded its highest ever annual credit expansion, at about Rs 6,500 crore for FY25. Of this, the MSME segment alone contributed Rs 4,000 crore. A key enabler of this surge has been the digital lending platform, implemented through Newgen software, with guidance from Boston Consulting Group (BCG) last year. The bank stated that for MSME loans below Rs 7.5 crore, the credit decision-making process is now largely automated, requiring minimal manual intervention. “This tech-driven approach significantly improved efficiency and turnaround time, helping to push MSME portfolio growth to 23 per cent for the year,” Kamakodi added.
Barring economic or geopolitical turbulence growth is expected to further accelerate in FY26, especially with the retail lending vertically gaining momentum in the second-half of FY25. On the liabilities side, deposits also grew 14 per cent, reaching Rs 63,526 crore from Rs 55,657 crore in the previous year.
The bank has also shown improvement in asset quality. Gross NPA fell to 3.09 per cent from 3.99 per cent last year, while Net NPA to 1.25 per cent from 1.97 per cent.
