City Union Bank Ltd. (CUB) reported standalone net profit for the June quarter rose 16% year-on-year to ₹264 crore helped by an increase in interest income, improvement in asset quality and lower provisions.

Interest income grew by 10% to ₹1,389 crore and net interest income stood at ₹545 crore (₹523 crore). Net interest margin contracted to 3.54%, from 3.67%, the private sector lender said.

Gross non-performing assets declined to 3.88%, from 4.91%. Net non-performing assets slid to 1.87% (2.51%), with the bad loans ratio easing back to pre-COVID levels.

Total business grew by 8% to ₹1,01,405 crore, of which deposits accounted for ₹54,857 crore. Current account savings account grew by 2% to ₹16,195 crore. Cost of deposits increased to 5.72% (5.36%), in line with the increases in policy rates.

The bank had a capital adequacy ratio of 23.58%. The bank made a provision of ₹109 crore, against ₹187 crore. Provision coverage ratio stood at 73%, with technical write-off against 70%.

The board on Friday approved a plan to raise further capital of ₹500 crore by way of a QIP.