In Q4, almost two-thirds of the business came from non-gold loans (₹1,935 crore)
In Q4, almost two-thirds of the business came from non-gold loans (₹1,935 crore)
City Union Bank (CUB) Ltd. is eyeing non-gold loans to spur future growth, even as it plans to roll out its own credit card within the next few weeks.
The private sector lender – which is looking beyond gold loans and the emergency credit limit guarantee scheme (ECLGS) for business – said it hoped to post low- to mid-double digit growth for FY23 compared with 11% seen in the last fiscal.
“Going forward, the proportion of non-gold loans in the overall credit growth in FY23 will be more than whatever we saw in FY22,” said N. Kamakodi, MD and CEO.
During the fourth quarter ended March, almost two-thirds of the business came from non-gold loans (₹1,935 crore).
“As we are out of the COVID mindset… we will be growing and the opportunities on non-gold loans look higher compared to whatever we have seen in the past,” he pointed out.
Also on the anvil is the introduction of the bank’s own credit card before the announcement of Q1 results. It said it had received a proposal from ‘42CS’, which manages cards for various banks across geographies.
The company would be the third-party service provider for technology and operational services on a profit-sharing basis.
“We will start slowly and steadily covering our existing customers. Final nitty gritties are being worked out. Soon we will be linking the wearables with the credit card as well so that the customers will be keen on using it more by availing of all the benefits through the credit card,” Mr. Kamakodi said.
According to him, credit card is the one missing product in the bank’s offering. Though the bank had tied up with SBI Cards for offering a co-branded card to its customers, it said it was now gearing up to have its own credit card.
“We feel it is time to launch our own credit card,” he pointed out. “The general consensus is that the ratio between debit cards and credit cards issued by the bank is [in the range of] 3:1. We currently have 26 lakhs debit cards meaning that our customers should have around nine lakh credit cards,” he reasoned.
Credit growth for FY23 ‘should be in the low to middle double digits’, he said. In the December quarter, the net non-performing asset ratio was 3.44%, compared 1.47% year earlier. Mr. Kamakodi said the bank aimed to bring it down gradually to 2%
