City Union Bank chief expects total recast at around 5-6%

Private sector lender City Union Bank (CUB) said the bank has identified accounts worth Rs 1,037 crore for restructuring during the fourth quarter of the current fiscal. Out of these, around 102 accounts amounting to Rs 517 crore are under MSME and 1,224 borrowal accounts amounting to Rs 520 crore are in the non-MSME category, N Kamakodi, MD & CEO, told analysts at an earnings call recently.

“Overall, the total restructuring will be around 5-6%, which is well within the range we shared with you all. During Q3, we have restructured 60 borrowal accounts to the tune of Rs 321 crore. The total restructured MSME accounts as on December 31, 2020 stood at Rs 807 crore consisting of 233 borrowers. The present percentage of restructured accounts stands at 2.21% of the advances, ” he said.

Recovery by the bank stands improved during Q3 as compared to Q2 and Q1 at Rs 106 crore and total recovery for the nine-month period was at Rs 215 crore. The recovery during Q1 and Q2 were at Rs 24 crore and Rs 84 crore, respectively.

“We are pushing a lot of efforts on recovery. Though we could see some improvement, but the same was not as we used to have during pre-Covid period, where we used to generally manage the addition through recovery,” he said.

According to him, currently all recoveries are happening through negotiated settlements with borrowers. Once the SC judgment comes, the recovery will be possible through SARFESI and other means. “Our recovery percentage is 70%-75%. We will re-evaluate in Q4,” he said.