City Union Bank (CUB) is enhancing its portfolio by introducing credit cards, prompted by existing liability customers opting for credit cards from other banks. Managing Director N. Kamakodi noted the importance of this step for customer retention, as the bank aims to mitigate the risk of losing clients. Recently, CUB launched a co-branded credit card with Chennai Super Kings (CSK) to capitalize on regional brand appeal. Despite this addition, CUB remains focused on secured retail lending, with credit cards making up less than 1% of the loan book. The bank aims for 15-16% growth in FY26 and predicts improving liquidity conditions.
“We observed that a considerable number of our current liability customers were acquiring credit cards from other banks, which heightened the risk of losing those customers. To address this concern, we pinpointed credit cards as an essential product missing from our portfolio,” Kamakodi clarified.
To address this shortfall in offerings, CUB resolved to unveil its own credit card to enhance customer loyalty.
The bank has recently introduced a co-branded credit card in partnership with Chennai Super Kings (CSK) to leverage CSK’s robust regional brand appeal and encourage uptake among its target demographic, especially in Tamil Nadu.
Nevertheless, Kamakodi emphasized that the bank remains focused on its secured retail lending strategy, using the credit card primarily as a means of retaining customers rather than pursuing aggressive expansion into unsecured lending.
The credit card segment will constitute less than 1% of the bank’s total loan portfolio, with at least 80% of the cards distributed to existing clients.
City Union Bank aims for a growth rate of 15-16% in 2025-26 (FY26), with retail lending contributing 1-2% to this growth.
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Reflecting on the wider banking landscape, Kamakodi praised the recent initiatives by the Reserve Bank of India (RBI), such as interest rate reductions and liquidity enhancements. He noted that the tightening of liquidity conditions in 2023 had affected deposit growth, as retail depositors gravitated towards equities. Nonetheless, with loosening liquidity and declining interest rates, he anticipates a stabilization in conditions over the upcoming quarters.
The market capitalization of City Union Bank stands at approximately ₹11,074.03 crore. Its shares have surged nearly 8% in the last year.
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For the complete interview, please view the accompanying video.
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(Edited by : Shweta Mungre)