IDBI Bank reorganises corporate business

Merges large corporate and mid-size corporate groups, leaves out infrastructure corporate group

Public sector lender IDBI Bank has reorganised its corporate banking business to rationalise operations. It has merged large corporate and mid-size corporate groups.

Following change is structure which became effective from July one, over 35 branches, which were dealing separately dealing with big ticket and mid size companies, will be available for servicing corporate clients.

This has been done for improve coordination, better usage of skilled human resources and provide more service points across country, said a senior bank official.

However, Mumbai based bank will continue to keep operations of infrastructure corporate group (ICG) distinct. ICG is core strength of erstwhile development finance institution.

The outstanding loan book of three businesses – large, mid-size and infrastructure groups – was Rs 1,23,588 crore at end of March 2012, up from Rs 1,05,713 crore a year ago.

Another IDBI official said the shift in business emphasis, moderation in corporate business is backdrop of economic slowdown has also made management to review strategy.

After conversion into commercial banking entity, it has moderated expansion of loans book corporate segment. While bank wants to reinforce and gain from wholesale side, it will like to prune the share of corporate banking to 50% by 2015-16.

Going slow in expanding corporate loan book is also strategy to address challenge to meet priority sector lending (PSL) targets. It finds is it difficult to reach targets with limited branch base.

	Corporate Loan Book (Rs cr)
Vertical	Mar-12	Mar-11
Infrastructure group	32,436	27,543
Large corporate	52,462	42,795
Mid-corporate	38,690	35,375
Total	1,23,588	1,05,713
Source: IDBI Bank website

After becoming commercial bank, it has obligation to meet 40% target of PSL including that for agriculture and micro and small enterprises. 

Its credit grew by 15.32% to Rs 1,81,158 crore in 2011-12. The bank has followed a calibrated policy of growing loan book by 15% since FY11 to focus on improving profitability than just growing loan portfolio. It has set aim to expand loan book by 15% in 2012-13.