‘City Union Bank’s FY23 growth target hit by slowdown in capex cycle’

CHENNAI

City Union Bank Ltd. (CUB) is likely to miss its credit growth target of 15-18% a tad lower for the current fiscal due to a delay in start of investment cycle, said MD & CEO N. Kamakodi.

“The capacity utilisation of the manufacturing sector, according to RBI’s policy, is about 75% and the investment cycle will start once it crosses the 80% mark,” he said in an interview.

Earlier, Mr. Kamakodi had said that CUB would try to push the growth pedal and achieve 15-18% credit growth for FY23 assuming that the investment cycle would start from Q3.

Observing that there there could be a few months’ delay in the lender’s projected growth, he said, “Whatever we had projected, could be a shade lower. But overall, things are slowly progressing, but not at the level we were expecting.”

To a question, he said that it did not make sense to push for the growth at this point of time without a corresponding growth in deposit. It has to be balanced.

“We still have capacity to grow by ₹3,000 crore without increasing our deposits, which will be pushing our credit deposit ratio over 90%. But we are not. Our risk appetite doesn’t allow us to push so far,” he said.