MIRA INFORM REPORT

 

 

 

Report Date :

05.12.2008

 

IDENTIFICATION DETAILS

 

Name :

CITY UNION BANK LIMITED

 

 

Registered Office :

149, T R S Big Street, Tanjore District Kunbakonam – 612001, Tamilnadu

 

 

Country :

India

 

 

Financials (as on) :

31.03.2008

 

 

Date of Incorporation :

31.10.1904

 

 

Com. Reg. No.:

001287

 

 

CIN No.:

[Company Identification No.]

L65110TN1904PLC001287

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

CHEC05180A

 

 

PAN No.:

[Permanent Account No.]

PANAPPLIED

 

 

Legal Form :

A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchange.

 

 

Line of Business :

Subject is Engaged in Banking Activities.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

Fairly Large

 

Maximum Credit Limit :

Large

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well – established and reputed private sector bank. Available information indicates satisfactory financial responsibility financial responsibility of the bank and its management. Trade relations are fair. Business is active. Payments are reported as usually made as per commitments.

 

The bank can be considered good for normal business dealings.

 

 

LOCATIONS

 

Registered Office :

149, T R S Big Street, Tanjore District Kunbakonam – 612001, Tamilnadu, India

Tel. No.:

91– 435 – 2431622 / 2431412 / 2432322 / 2431510 / 2432367

Fax No.:

91 – 435 – 2431746

E-Mail :

shares@cityunionbank.com

cubco@tr.dot.net.in

cubibd@md2.vsnl.net.in

cubco@md3.vsnl.net.in

cubco_kmb@sancharnet.net

Website :

http://www.cityunion.com

 

 

International Banking

Division:

706, Anna Salai Chennai – 600006, Tamilnadu, India

Tel. No.:

91 – 44 – 28523152 / 6535 / 4903

Fax No.:

91 – 44 – 28520359

 

 

Merchant Banking

Division:

19, Mahalaksmi Street, T. Nagar, Chennai – 600017, Tamilnadu, India

Tel. No.:

91 – 44 – 24348577 / 24335250 / 5260

Fax No.:

91 – 44 – 24348586

Email :

cubibd@md2.vsnl.net.in

 

 

Branch Offices :

Located at:

 

  • Andhra Pradesh
  • New Delhi
  • Gujarat
  • Karnataka
  • Kerala
  • Maharashtra
  • Pondocherry
  • Tamilnadu
  • West Begal
  • Kolkata

 

 

DIRECTORS

 

Name :

Mr. S. Balasubramanian

Designation :

Chairman

Qualification :

M. SC. CAIIB, PGDFM

 

 

Name :

Mr. T. S. Venkatasubban

Designation :

Director

Qualification :

B. Com, FCA

 

 

Name :

Mr. V. Jayaraman

Designation :

Director

Qualification :

IRS Retd.

 

 

Name :

Mr. P. Vaidyanathan

Designation :

Director

Qualification :

B. Com, FCS, AICWA, ACS

 

 

Name :

Mr. K S Raman

Designation :

Director

Qualification :

M. Sc.

 

 

Name :

Mr. S. Bernard

Designation :

Director

Qualification :

B. Com, FCA

 

 

Name :

Mr. N. Kantha Kumar

Designation :

Director

Qualification :

B. Com, LLB, CAIIB

 

 

Name :

Mr. N. Sankaran

Designation :

Director

Qualification :

BE, MIE

 

 

Name :

Mr. M. Naganathan

Designation :

Director

Qualification :

B. Com, FCA

 

 

Name :

Mr. R. G. Chandramogan

Designation :

Director

 

 

Name :

Mr. N. Kamakod

Designation :

Executive Director

 

 

Name :

Mr. G. Mohandas

Designation :

Nominee Director (RBI)

 

 

KEY EXECUTIVES

 

Name :

Mr. N S Mohan

Designation :

Company Secretary

 

 

Name :

Mr. V. Ramesh

Designation :

Company Secretary

 

 

Name :

Mr. G. K. Balasubramanian

Designation :

Senior General Manager

 

 

Name :

Mr. S. Snidnarax

Designation :

Senior General Manager

 

 

Name :

Mr. R. Mokan

Designation :

General Manager

 

 

Name :

Mr. S. Sunder

Designation :

General Manager

 

 

Name :

Mr. S. Sekar

Designation :

General Manager

 

 

Name :

Mr. S. Sridharrax

Designation :

General Manager

 

 

Deputy General Managers :

Mr. M S Ramanuuam

Mr. V. Sunder

Mr. J. Rajagopalan

Mr. J. Kumar

Mr. N. Vijayanarasmhax

Mr. B. Sekar

 

 

Assistant General

Managers :

Mr. R. Chandrasekar

Mr. S. Raman

Mr. R. K. Vswanathan

Mr. B. Rajagopalan

Mr. S. Balasubramanian

Mr. S. Rahjagopalan

Mr. K. Manarajan

Mr. Ramesh Subrakant

Mr. R. Krishanan

Mr. K. Devarayan

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

(As on 30.09.2008)

 

Names of Shareholders

No. of Shares

Percentage of Holding

 

 

 

Public shareholding

 

 

Institutions

 

 

Mutual Funds / Axis

6014141

1.88

Financial Institutions/Banks

5162836

1.61

Insurance Companies

19252093

6.02

Foreign Institutional Investors

37903592

11.85

 

0

0

Non-Institutions

0

0

Bodies Corporate

90223426

28.20

Individuals -

0

0

Individual shareholders holding nominal share capital up to Rs.0.100 million.

110525532

34.54

Individual shareholders holding nominal share capital in excess of Rs. 0.100 million.

50423509

15.76

Any Other

0

0

Clearing Member

434191

0.12

Trust

60680

0.02

 

 

Total

320000000

100.00

 

BUSINESS DETAILS

 

Line of Business :

Subject is Engaged in Banking Activities.

 

 

GENERAL INFORMATION

 

Customers :
  • SUN TV
  • Thomson TV
  • Sakthi Group

 

 

No. of Employees :

2171 (28 executives, 605 officers, 1204 clerks and 334 sub-ordinate staff)

 

 

Bankers :

Reserve Bank of India

 

Correspondent Bank’s Name

Place

 

 

Commonwealth Bank

Australia, Sydney

Creditanstalt Bankers

Austria, Wion

Hong Kong Bank

Canada, Toronto

American Express Bank Limited

France, Paris

Union Bank

Finland, Helsinki

Cesskoslovenska Obchodni Bank A. S.

Czech Republic

Banque Sudameris S. A.

France, Paris

Berliner Bank

Germany, Frankfurt

Hong Kong & Shanghai Banking Corporation

HongKong

Israel Discount Bank

Israel, Telaviv

Bank of Commercial

Italy, Milinado

American Express Bank

Japan, Tokyo

Bank of Kuwait and Middle East

Kuwait

Mauritius Commercial Bank

Mauritius

ABN Amro Bank

Netherlands, Amsterdam

Saudi British Bank

Saudi Arabia, Jeddah

Saudi Hollandi Bank

Saudi Arabia, Riyadh

Bharath Overseas Bank Limited

Thailand, Bangkok

Standard Chartered Bank Limited

UAE, Dubai

British Bank of the Middle East

UAE, Dubai

American Express Bank

UK, London

Bankers Trust Company

USA, New York

Union Bank of California International

USA, New York

 

 

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :
  • Price Patt and Company

Chartered Accountants

 

  • G Suriyanarayanan

Chartered Accountants

 

  • R Ganesh

Chartered Accountants

 

  • Arasu and Arunachalam

Chartered Accountants

 

  • S. Ramadoss

Chartered Accountants

 

  • S. Bernard and Company

Chartered Accountants

 

  • Abarna and Ananthan

Chartered Accountants

 

 

Joint Venture Company :

International Asset Reconstruction Company Private Limited

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

1000000000

Equity Shares

Rs.1/- each

Rs.1000.000 Millions

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

320000000

Equity Shares

Rs.1/- each

Rs.320.000 Millions

 

 

 

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2008

31.03.2007

31.03.2006

 

 

 

 

Share Capital

320.000

252.000

240.000

Reserves & Surplus

5348.617

3405.078

2621.500

Deposits

64249.559

46993.317

35177.400

Borrowings

26.416

198.931

751.800

Other Liabilities & Provisions

3545.071

2780.813

2479.900

 

 

 

 
GRAND TOTAL

73489.663

53630.139

41270.600

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

Cash & Balances with RBI

6958.752

3169.530

2137.500

Balances with Banks & money at Call & Short Notice

1210.549

1669.231

526.300

Investments

17179.552

13069.999

10574.800

Advances

45370.570

33292.310

25495.300

Fixed Assets

434.686

392.008

360.300

Other Assets

2335.554

2037.061

2176.400

 

 

 

 
GRAND TOTAL

73489.663

53630.139

41270.600

 

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2008

31.03.2007

31.03.2006

 

 

 

 

Interest Earned

6011.523

4000.538

3263.900

Other Income

850.940

540.822

443.500

Total Income

6862.463

4541.360

3707.400

 

 

 

 
Expenditures:

 

 

 
Interest expended

3961.844

2325.575

1866.100
Operating Expenses

1087.608

900.956

749.800
Provisions & Contingencies

795.704

596.732

527.800
Total Expenditures

5845.156

3823.263

3143.700

 

 

 

 

Profit / Loss

 

 

 

Net Profit

1017.307

718.097

563.700

Profit Brought Forward

0.654

0.410

0.500

Total

1017.961

718.507

564.200

 

 

QUARTERLY RESULTS

 

PARTICULARS

 

 

30.06.2008

1st Quarter

30.09.2008

2nd Quarter

 

 

 

 

Sales Turnover

 

1860.200

 1952.900

Other Income

 

215.000

 230.300

Total Income

 

 2075.200

 2183.200

Total Expenditure

 

 505.000

 439.500

Operating Profile

 

 1570.200

 1743.700

Interests

 

 1279.800

 1309.800

Gross Profit

 

 290.400

 433.900

Depreciation

 

 0.000

 0.000

Tax

 

 28.000

 57.400

Reported PAT

 

 262.400

 376.500

 

 

KEY RATIOS

 

PARTICULARS

 

31.03.2008

31.03.2007

31.03.2006

Credit Deposit Ratio

70.71

71.54

68.99

Investment Deposit Ratio

27.19

28.78

32.66

Cash Deposit Ratio

9.10

6.46

5.67

Interest Expended / Interest Earned

65.90

58.13

57.17

Other Income / Total Income

13.06

13.04

11.96

Operating Expenses / Total Income

16.48

20.80

20.22

Interest Income / Total Funds

9.46

8.43

8.56

Interest Expended / Total Funds

6.23

4.90

4.90

Net Interest Income / Total Funds

3.22

3.53

3.67

Non Interest Income / Total Funds

1.42

1.26

1.16

Operating Expenses / Total Income

1.79

2.02

1.97

Profit Before Provisions / Total Funds

2.85

2.78

2.86

Net Profit / Total Funds

1.60

1.51

1.48

Return On Net Worth (%)

21.82

22.03

21.40

 

 

 

LOCAL AGENCY FURTHER INFORMATION

 

 

HISTORY:

 

The Kumbakonam Bank Limited, as it was then called, was founded in the year 1904 by a devoted group of prominent and enterprising citizens of Kumbakonam town in Tamilnadu. In 1965, under a scheme of amalgamation, two other local banks, The City Forward Bank Limited, and The Union Bank Limited, were amalgameted with it and consequent upon this, the name was changed to 'The Kumbakonam City Union Bank Limited' In the process of building up of an image of national character, the name of the bank was changed to the present name 'City Union Bank Limited' in the year 1987. 

 
The Bank is one of the scheduled commercial Banks in the Private Sector with a hoary tradition and excellent track record with a strong base in Urban, Semi-Urban and Rural Centres in South India. 

 
The Bank is a Category I Merchant Banker and has been the Lead Manager and Underwriter of many Issues. 

 
During the year 2005-2006, the Bank expanded its network by opening branches at Udumalpet (Tamil Nadu), Indra Nagar (Bangalore), Cuddapah & Kurnool (Andhra Pradesh, Vashi (Mumbai), Tiruchengodu (Tamil Nadu), Vijayawada II & Guntur II (Andhra Pradesh),  

 
The current financial year, four more branches viz Kannur (Kerala), Hosur(Tamil Nadu), Mysore and Jayanagar (Karnataka) have been opened so far taking the network to 146 branches. The Bank also installed 23 more ATMs at various branches. 

 
The Bank also obtained license to function as Depository Participant under NSDL during the year.

 

 

 

ECONOMY AND BANKING SCENARIO 

 
The Indian Economy witnessed slackening of momentum in 2007-08 while Global economic scene has been characterised by rising inflation, slower growth and tightening monetary conditions. The Central Statistical Organisation (CSO) in its advance estimates released in February 2008 placed our GDP growth at 8.7 %. The real GDP growth in Agriculture and Allied activities, Industry and Services sector was 2.6%, 8.6% and 10.6% in 200708 respectively as against 3.8%, 10.6% and 11.2% in 2006-07 respectively. 

 
Scheduled Commercial Banks' demand and time deposits grew at 20.2% and 22.6% respectively in 2007-08 compared to 17.9% and 25.1% respectively in 2006-07. Further, the banking sector's lendable resources were augmented substantially by capital raised through public issues and innovative capital instruments during 200708. Bank credit to the commercial sector increased by 20.3% in 2007-08 compared to 25.8% in 2006-07. 

 
The weighted average yield on Government Securities increased by 23 basis points from 7.89% in 2006-07 to 8.12 % in 2007-08.The weighted average call money rates ranged between 7.37% and 8.33%. Interest rates in various segments decreased during the year. The Scheduled Commercial Banks increased the deposit rates for long term deposits and reduced the interest rates for short term deposits. The lending rates of the Scheduled Commercial Banks increased during FY 2007-08 due to higher cost of funds. The Call money rates edged down during the year in tandem with movements in policy rates. Interest rates in the CBLO and market repo segments moved in sympathy with call rates and declined. 

 
In the fixed income segment, Government bond yields in the major economies, which had firmed up in the first half of 2007, have softened thereafter since demand for government debt has increased as investors shifted their funds to the treasuries acknowledging the likelihood that the economy is already in a recession and seeking safety. Since the beginning of the turbulence in August 2007, central banks of advanced economies have responded with both conventional and unconventional measures to ease liquidity stress in financial markets and solvency issues among large financial institutions. 

 
During the fourth quarter of 2007-08, financial markets were impacted by unusual swings and high volatility in foreign exchange flows as well as in cash balances of the Government with the Reserve Bank with consequent shifts in liquidity conditions. These variations were smoothened by active liquidity management through a combination of instruments such as the MSS, the LAF and the CRR so that volatility in overnight interest rates was broadly contained within the informal LAF corridor. 

 
The accelerated process of globalisation of financial markets and integration of Indian financial sector with rest of the world has enhanced both opportunities and challenges. 

 

With strong fundamentals and resilience of banks, the banking sector continues to occupy a strategic position in the Indian Economy with more than 70% of funds routed through banks. Bank credit as a proportion to GDP is over 50%.Extensive support by banks to SMEs, agriculture and other productive segments and inclusion of finance in growth strategy makes banks to play an important role in India's growth and development. Further, banks in India have shown remarkable progress in operational efficiency, profitability and productivity due to the well sequenced and calibrated moves of RBI. Banks in India are poised to shift to the next frontier of growth with significant global scale of operations. 

 

 

PERFORMANCE OF YOUR BANK 

 

The Bank crossed another flag post of Rs.110000.000 Millions mark in total business during the Financial Year 2007-08. The Bank continues to perform creditably to maintain its growth level above the industry benchmarks. 

 
The Bank achieved an operating profit of Rs.1813.000 Millions as against Rs.1314.800 Millions recorded in the previous year. The net profit increased by 41.67% from Rs.718.100 Millions to Rs 1017.300 Millions. The Net Interest Income rose from Rs.1675.000 Millions to Rs.2049.700 Millions thereby registering a growth of 22.37%. The return on average assets was higher at 1.60% when compared to 1.570/a last year. 

 

 

 

NETWORTH AND CRAR

 

Pursuant to the approval of the Shareholders at the Extra Ordinary General Meeting held on 02-06-2007 and in terms of the approval of the Reserve Bank of India (RBI) dated 26th September, 2007, the Board of Directors at its meeting held on 8th October, 2007 have allotted by way of preferential allotment, 68,00,000 equity shares of Rs.10/- each aggregating to Rs.125,44,70,000 (including share premium of Rs.118,64,70,000) to the following entities.

 

 

No of Equity Shares

Name of the Investors

Amount per shares

(Inclusive of Premium Rs. P)

 

 

 

300000

Larsen & Toubro Limited

169.15

1500000

Life Insurance Corporation of India

169.15

1500000

Nederlandse Financierings Maatschappij Voor Ontwikkelingslande N.V. (FMO)

190.00

1250000

Ares Investments

190.00

1250000

Argonaut Ventures

190.00

1000000

Yatish Trading Company Private Limited

190.00

 

The Bank's paid-up capital stood at Rs.320.000 Millions as on 31st March, 2008. The Bank's net worth increased from Rs.3657.100 Millions as on 31-03-2007 to Rs.5668.600 Millions as on 31-03-2008. The Capital Adequacy Ratio as at 31st March, 2008 stood at 12.48 % well above the stipulated norm. 

 

 

BRANCH EXPANSION 

 
The Bank has expanded its network by opening branches at Belgaum, Hubli, Mangalore, Davengere (Karnataka) Prodattur, Warrangal (Andhra Pradesh), Gandhi Nagar, Kumbakonam (Tamil Nadu), Tiruvannamalai (Tamil Nadu), Sivaganga (Tamil Nadu), Nandyal (Andhra Pradesh), Ramanathapuram (Tamil Nadu), Thane (Maharashtra), Ichalkaranji & Nagpur (Maharashtra), Anantapur (Andhra Pradesh), Dharmavaram (Andhra Pradesh), Rajkot (Gujarat), Nashik (Maharashtra) and Devakottai (Tamil Nadu). In the current financial year, three branches K.K.Nagar, Chennai, Maraimalai Nagar, and Uthukkuli have been opened so far taking the network to 185 branches .The Bank has proposed to open more branches during the current financial year. 

 

 

INTERNATIONAL BANKING 

 
As at 31st March, 2008, The Bank's turnover in Foreign Exchange Business was Rs.18056.700 Millions thereby registering an increase of 31.05% over the corresponding period last year. The non-resident deposits as on 31st March, 2008 stood at Rs.1293.800 Millions. 

 

 

MANAGEMENT DISCUSSION AND ANALYSIS REPORT 

 
ECONOMIC SCENARIO 

 
The Indian Economy witnessed slackening of momentum over the four quarters of 2007-08. While the Central Statistical Organisation (CSO) in its advance estimates released in February 2008 placed the real GDP growth at 8.7%, GDP growth was 9.3%, 8.9%, 8.4% and 8.4%, respectively, in the four quarters of 2007-08 as against 9.6%, 10.1%, 9.1% and 9.7% in the corresponding quarters of 2006-07. 

 
Real GDP in Agriculture and Allied activities, Industry, Services sector slowed down to 2.6% ,8.6% and 10.6%respectively in 2007-08 as compared to 3.8%,10.6% and 11.2% in 2006-07 respectively. During the year 2007-2008, Indian economy recorded an average growth of 8.7%. Marginal deceleration in economic activity could be attributed to global factors such as economic slowdown in the US, high oil prices combined with rising food prices. Export growth was adversely affected by rupee appreciation and also on account of lack of adequate demand for products and services in the overseas markets. 

 


BANKING SCENARIO 

 
The Banking scenario is expected to be more challenging in the environment of fierce competition and only the efficient banks are likely to perform well. The ASCBs advances growth is being projected at 20% and deposits at 24%. 
 
Volatility in international crude oil price coupled with surge in price of food articles and manufactured goods remains a crucial factor contributing to spiraling inflation. The trend is expected to continue for some more months before it becomes steady and moves downwards. 

 
Following measures were initiated during the financial year 2007-08 

 

 

 

 
The interest rate ceiling on FCNR (B) deposits reduced by 50 basis points to LIBOR minus 75 points with effect from April, 2007. 

 

The interest rate ceiling on NR(E) RA deposits reduced by 50 basis points to LIBOR/SWAP rates with effect from April, 2007. 

 
The risk weight on the residential housing loans to individuals was reduced from the existing 75% to 50% for loans up to Rs.2.000 Millions. 

 
Revised guidelines on lending to the priority sector by all scheduled commercial Banks issued in April, 2007. 

 
Disclosure of segment reporting under Accounting Standard 17 enhanced to include more categories of corporate /wholesale banking, retail banking and other banking business. 

 
Banks with International presence have been advised to adopt the Standardised Approach for credit risk and Basic Indicator Approach for operational risk the New Capital Adequacy Framework (BASEL II) with effect from March 31, 2008 while all other banks shall move over by 31.03.2009. 

 


OPPORTUNITIES AHEAD 


The Bank has made rapid strides on the technology front. All the branches are connected to Core Banking Solution designed and developed by IT Major Tata Consultancy Services Limited in pursuit of excellence in customer service and provision of technology oriented services. Customers can now have access to their accounts from any of the branches. The Bank also provides Internet Banking facilities to its customers. The Bank has also tied up with Doha Bank QSC, Qatar & ICICI Bank for hassle free e-Remittances services for NRIs. The Bank has also connected itself with NFS and Bank of India (Cash-Tree) which would enable the customers to have access to more than 15000 ATMs across the Country. The Bank has on its agenda opening of a few more branches besides adding more ATMs. The Bank has also entered into an agreement with M/s. Wealth Advisors (India) Private Limited for providing Wealth Management Services including investment advisory.

 

 

OUTLOOK 
 
Growth of investments has been significant in the economy and this formed the basis for impressive economic growth in India recently. This trend is expected to continue in 2008-09. Record price levels in oil and other commodities at the global level may pose problems for inflation management domestically and RBI would accord top priority to keep inflation under control. This may have implications on interest rates and reserve requirements prescribed by RBI. Thus Banking industry continues to undergo metamorphic changes on account of prevailing trends in globalization and liberalization. Universal banking has become the flavour of the season. Technological progress has in a way commoditized banking services. Volatility in interest rates, increasing competition among banks and increasing operational risks associated with enlargement of volume and variety of business are some of the factors which need a close look and call for a suitable response as we progress further. The Bank is confident of taking all steps necessary to ensure a sustained growth. 

 
By ensuring excellent customer service, personalized and value added products and achieving operational efficiency to compete in the market, the bank looks ahead for a glorious future. 

 


RISKS AND CONCERNS 

 
A comprehensive integrated risk management system becomes essential to manage the various type of risks that the banks are exposed to. The bank has established a comprehensive risk management structure as per RBI guidelines on risk management for managing various risks like Credit Risk, Market Risk and Operational Risk. The bank has Credit Risk Management Department, Asset Liability Management Committee and Task Force for Risk Based Internal Audit for identification, measurement, monitoring and management of risks to mitigate their adverse impact on its financials. A well developed Risk Management System is needed to counter these risks faced by the banks and effective risk management is critical to the bank's success. 

 
Risk is an integral part of the banking business and the bank aims to achieve an appropriate trade off between risk and return and thereby maximize shareholder value. The bank has initiated the necessary steps to streamline systems, strategies for a smooth transition to BASEL II framework within the time period stipulated by the Regulator. 

 

 

PERFORMANCE HIGHLIGHTS 2007-08

 

Operating Profit

Operating Profit improved from Rs.1314.800 Millions to Rs. 1813.000 Millions registering a growth rate of 37.89%

 

Net Profit

Net Profit improved from Rs. 718.100 Millions to Rs. 1017.300 Millions recording an increase of 41.67%

 

Deposits

Total Deposits rose by 36.72% from Rs. 46993.300 Millions to Rs. 64249.600 Millions and Cost of Deposits increased from 5.95% to 7.23%

 

Advances

Advances grew by 36.28% from Rs. 33292.300 Millions to Rs. 45370.600 Millions. Yield on Advances also increased from 11.32% to 12.82%

 

Business

Total Business stood at Rs. 110000.000 Millions

 

Net worth

Owned capital funds have grown to Rs. 5668.600 Millions from Rs. 3657.100 Millions

 

Earning per share

Earnings per share grew from Rs. 2.99 to Rs. 3.18

 

Intrinsic value of Re.1/- per share

Intrinsic value of Re.1/- per share rose from Rs. 145.12 (F.V. Rs.10/-) to Rs.17.78 (F.V. Re.1/-)

 

Return on Average Assets

Return on Average Assets (ROA) rose to 1.60% from 1.57%

 

Net Interest Margin

Net Interest Margin (NIM) - 3.22%

 

Capital Adequacy Ratio

Capital Adequacy Ratio comfortably stands at 12.48%.

 

Non - Performing Assets

The percentage of Gross NPA to Gross Advances declined to 1.81% from 2.58%. The Percentage of Net NPA to Net Advances declined from 1.09% to 0.98%.

 

Staff Productivity

Staff Productivity increased to Rs 42.057 Millions from Rs.35.012 Millions

 

 

WEBSITE DETAILS:

 

PROFILE:

 

The bank, 'The Kumbakonam Bank Limited' as it was then called was incorporated as a limited company on 31st October, 1904. The first Memorandum of Association was signed by twenty devoted and prominent citizens of Kumbakonam including Sarvashri R. Santhanam Iyer, S.Krishna Iyer, V.Krishnaswami Iyengar and T.S.Raghavachariar. Shri T.S.Raghavachariar was the First Agent of the Bank.  In 1908, he was succeeded by Shri R. Santhanam Iyer who became the Secretary of the bank under the amended Articles of Association which created the office of a Secretary to be in charge of the Bank's Management in the place of the Agent, which post he held till his death in 1926.   He was succeeded by Shri. S. Mahalinga Iyer as Secretary who subsequently became the First full-time Managing Director of the bank in tune with the amendment of Articles in 1929.  He held the position of Secretary from 1926 to 1929 and that of Managing Director from 1929 to 1963.

 

The bank in the beginning preferred the role of a regional bank and slowly but steadily built for itself a place in the Delta District  Thanjavur.   The first Branch of the Bank was opened at Mannargudi on 24th January 1930.  Thereafter, branches were opened at Nagapattinam, Sannanallur, Ayyampet, Tirukattupalli, Tiruvarur, Manapparai, Mayuram and Porayar  within  a  span of  twenty five years.  The Bank was included in the Second Schedule of Reserve Bank of India Act,1934, on 22nd March 1945.

 

The Bank celebrated it's Golden Jubilee on 14th November, 1954 at Kumbakonam under the Presidentship of Shri.C.R. Srinivasan, Editor, 'Swadesmitran' & Director, Reserve Bank of India.

 

In 1957, the bank took over the assets and liabilities of the Common Wealth Bank Limited and in the process annexed to it the five Branches of Common Wealth Bank Limited at Aduthurai, Kodavasal, Valangaiman, Jayankondacholopuram and Ariyalur.

 

In 1963, Shri. R. A.Venkataramani Iyer took charge as the Chairman of the Bank which position he held upto 1969.

 

In April, 1965, two other local banks viz., 'The City Forward Bank Limited' and 'The Union Bank Limited' were amalgamated with the Bank under a scheme of amalgamation with the resultant addition of six more branches viz., Kumbakonam-Town, Nannilam, Koradacherry, Tiruvidaimarudur, Tirupanandal and Kuttalam. Consequently, the Bank's name was changed to 'The Kumbakonam City Union Bank Limited'.

 

In November 1965, the bank's first branch at Madras was opened at Thiyagaraya Nagar. In May, 1969 the Bank secured  the services of Shri. O.R. Srinivasan, a former Officer   of Reserve Bank of India to be at the helm of affairs as Chairman and Chief Executive Officer which event proved to be a turning point in the annals of the Bank. Under the new Management the Branch Expansion got a fresh impetus and branches were opened at Eravancheri, Sembanarkoil, Tiruchirapalli, Madurai, Thanjavur, Dindigul, Keelapalur, Tirumakkottai, Kottur, Tiruvarur Town and Coimbatore during the period from March, 1968 to August, 1973.

 

In April, 1974 the bank secured the services of Shri. K.Srinivasan, another former Senior Officer of Reserve Bank of India as it's Secretary.  At  that time a Young Chartered Accountant from Thippirajapuram, a village near Kumbakonam, Shri. V.Narayanan was appointed as Assistant Secretary of the Bank.

 

During the period ended 31-12-1976 Branches were opened at Periyakulam, Mandaveli (Madras), Pattukkottai, Triplicane (Madras), Cuddalore, Pudukkottai, Chidambaram and Salem.

 

When Shri. O.R. Srinivasan relinquished his office in June 1977, the then Secretary Shri. K.Srinivasan was appointed as Chairman and Chief Executive Officer of the Bank and Shri. V. Narayanan was elevated to the rank of the Secretary.

 

From July,1977 to September,1979 the bank has opened ten more branches including those at George Town (Madras), Mount Road (Madras), Tirunelveli and Karaikudi.

 

The Bank celebrated its Platinum Jubilee on 9th December, 1979 at Kumbakonam with Dr. Rajah Sir M.A.Muthiah Chettiar, Shri. G.Rengasamy Moopanar, Shri. Kosi.Mani and Shri. M.V.Arunachalam as Guests of Honour.

 

In November, 1980, the then Secretary Shri. V.Narayanan, assumed charge as the Chairman and Chief Executive Officer of the Bank consequent to the completion of the term by Shri. K.Srinivasan.   The event opened a glorious chapter in the history of the bank. 

 

The first branch outside the state of Tamilnadu was opened at Sultanpet, Bangalore in Karnataka in September,1980.  Branches were also opened at the twin cities of Hyderabad and Secunderabad in Andhrapradesh.  In tune with the national image attached to the Bank, the Bank's name was changed to 'City Union Bank Limited' with   effect  from  December,1987.     

 

The Bank started it's own Staff Training College on 21st August, 1989 at Kumbakonam with the avowed objective of imparting need based and result oriented training to its Staff Members irrespective of the cadre.

 

The bank has introduced computerisation in the year 1990 and as of now all the Branches have been computerised.  

 

The Bank's Centenary Celebrations were inaugurated on 27th December,2003 at the Saraswathi Patasala Girl's Higher Secondary School Grounds, Kumbakonam under the Chairmanship of Shri. V.Narayanan with Shri. R.Venkataraman, Former President of India, Dr.A.R.Lakshmanan, Judge, Supreme Court, New Delhi and Shri. N.Rengachari, Retired Chairman, IRDA & Advisor to the Government of Andhra Pradesh as distinguished Guests. 

 

The bank has entered into an agreement with Tata Consultancy Services Limited for introducing Core Banking Solution[CBS].As such all the branches have been brought  under CBS as on date.

 

The bank has made arrangements with IDBI Bank Limited, and Axis Bank Limited, for issuing at par cheques and sending outstation bills for collection.

 

Automated Teller Machines are available at select branches of the bank where the ATM Card holders can withdraw cash, make balance enquiries and obtain Statement of accounts.

 

The Bank has tied up with Export Credit & Guarantee Corporation Limited [ECGC] for marketing export credit insurance products through its branch network.

 

The Bank has obtained License to function as Depository  Participant under National Securities Depository Limited.

      

The Bank is having a network of 196 Branches spread in different parts of our Country as on 20-10-2008.

 

 

The Bank offers the following investment schemes for both domestic and NRI investors:

 

 

NRI SERVICES:

 

 

DEPOSITS PRODUCTS:

 

 

CREDIT PRODUCTS:

 

 

 

CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                  None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 

 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.49.79

UK Pound

1

Rs.73.37

Euro

1

Rs.63.08

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

8

PAID-UP CAPITAL

1~10

7

OPERATING SCALE

1~10

7

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

8

--PROFITABILIRY

1~10

6

--LIQUIDITY

1~10

8

--LEVERAGE

1~10

8

--RESERVES

1~10

8

--CREDIT LINES

1~10

8

--MARGINS

-5~5

-

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

YES

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

YES

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

YES

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

65

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions