New Delhi: Indian private sector lender City Union Bank expects to maintain its net interest margin (NIM) above 3.3% during the current financial year 2012-13, Managing Director and Chief Executive Officer N Kamakodi said Monday.
"The targeted NIMs is around 3.3% and the band is between 3%-3.7% and we feel we should be able to do that... Overall it will be above our target NIM of 3.3%," Kamakodi told CNBC TV18 in an interview.
Kamakodi also said that he expects the bank to maintain its asset quality at the current level although he expressed concern over the decelerating economy.
"Even in a difficult year we were able to show a reduced percentage of gross and net NPA (non-performing assets) for fiscal (2011-12). We can be hopeful of maintaining the asset quality as we move further, but the concern is always there if overall, the general economic environment remains stressful for extended period of time...," he said.
The company's gross NPAs, or bad loans, fell to 1.01% of advances as on March 31, 2012 from 1.21% in the previous fiscal year, while its net NPAs dropped to 0.44% from 0.52%.
City Union Bank's net profit soared 40% on-year to Rs 719.8 million during fourth quarter (Jan-Mar) of fiscal 2011-12 from Rs 513.9 million in the same quarter a year ago driven by rise in income from interest and fall in provisions.
Shares of the bank Monday ended at Rs 47.75 on the Bombay Stock Exchange (BSE), up 0.42% from the previous close.