City Union Bank eyes credit pickup as GST cuts benefit 50% of its loan book

City Union Bank expects a credit growth boost in the coming quarters, with nearly half of its loan book exposed to segments likely to gain from the Goods and Services Tax (GST) rate cuts. Managing Director and CEO N Kamakodi said the bank is currently evaluating the impact of the policy changes and will outline its revised growth strategy along with its second quarter results.

“Overall, this is extremely positive compared to whatever we started the year with,” Kamakodi said, adding that MSME, agri, and trading segments — which account for a significant portion of the portfolio — are expected to see improved demand. “At least 50% of our book is in the segments which are expecting a boost because of the recent announcements,” he noted.

The Tamil Nadu-based private sector lender expects system-wide credit growth to improve from the earlier range of 10–12% to the low teens in FY26, as both business and retail segments see incremental credit demand.

For City Union Bank, the outlook remains above industry levels. “Our strategy always had been to have 2-3% over and above the growth of the industry. I think we should be able to have that. We had a very decent growth in the first quarter, and that momentum is continuing. We hope it will be sustaining, and probably it will inch up is what we expect on growth front,” Kamakodi added.

The bank continues to see steady traction in the MSME segment, which accounts for around 40% of its loan book.

Margins have also remained resilient, with management confident of sustaining them for the year despite some short-term pressure.



City Union Bank’s current market capitalisation is ₹ 14,475 crore. The stock is currently trading at ₹195.58 as of 9:19 am on the NSE and has gained 14% over the last year.

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