Chennai, May 18 (IANS): Privately-owned City Union Bank hopes to log a growth of 20-30 percent this fiscal despite the economic outlook not being encouraging while the net interest margin is expected to go down slightly, said a top company official.

"We hope to maintain a growth rate between 20-30 percent this year. At the beginning of last fiscal we thought the economic condition would improve during the first two quarters of the current fiscal (2012-13). But going by the current trend we think the economy would hit the growth path during the beginning of the next financial year," N. Kamakodi, the bank's managing director, told reporters here Friday.

Announcing the bank's annual results for the year 2011-12, Kamakodi said the net interest margin is expected to go down by 10-20 basis points from the last year's level of 3.4 percent.

The bank plans to complete the rights issue of Rs.400 crore in four month's time.

According to Kamakodi, the bank has started the process of raising around Rs.400 crore through the issue of shares on rights basis.

"The pricing and other things are being decided and the whole process is expected to be over in four month's time," Kamakodi said.

For the fiscal that went by, City Union Bank posted an after-tax profit of Rs.280.25 crore on a total income of Rs.1,903.90 crore, up from Rs.215.05 crore and Rs.1,219.41 crore logged during 2010-11.

The bank's total business was at Rs.28,563 crore (deposits Rs.16,341 crore, advances Rs.12,222 crore) as against Rs.22,243 crore (deposits Rs.12,914 crore, advances Rs.9,329 crore) done during 2010-11.

For the period under review, City Union Bank's net non-performing assets (NPA) came down to 0.44 percent from 0.52 percent as on March 31, 2011.

According to Kamakodi, the bank's profit is higher by Rs.10 crore last fiscal as the provisions towards doubtful debts came down to around Rs.57 crore from Rs.67 crore during fiscal 2010-11.

On the restructuring of advances, Kamakodi said the bank had restructured only six loan accounts last year involving a total amount of Rs.38.63 crore.

"The overall restructured loan portfolio is around Rs.268 crore, down from Rs.533 crore three years before," Kamakodi said.

"Only Rs.13 crore has become bad out of our restructured accounts during the past three years. Ninety percent of our loan book is covered by collateral security," Kamakodi added.

In 2011, City Union Bank opened 52 branches taking its total network to 300, while it has around 100 new branch licences.