OBC retains loan growth target of 22%

Indicating an improvement in credit pick-up, State-owned Oriental Bank of Commerce (OBC), on Thursday said it expected the loan book to grow at 20-22 per cent this financial year.

“Credit growth has been slightly subdued this year compared to last year, but now there are some signs of a pick-up in November,” Chairman and Managing Director TY Prabhu told reporters here after inaugurating branch in central Mumbai.

“Our loan book grew by 23 per cent in 12 months ended September. We are retaining our growth targets which were set at the beginning of the year,” he said.

The credit growth was coming from retail, SME and agriculture, he added.

It expects deposits to grow at 24 per cent in 2009-10. Asked about a reduction in the bank’s deposit rates, he said the bank has already cut its deposit rates and they were very competitive.

The liquidity in the system is high and banks face challenges in deploying resources due to low credit demand. Interest rates on short-term deposits have declined sharply. And if the credit demand does not pick up substantially, there would be room to reduce the rates at the longer end of maturity, according to him.