BoM to attain 25% credit growth in FY11

Public sector lender Bank of Maharashtra is hopeful of achieving a 25 per cent credit growth along with higher profitability during the current financial year.

The bank, which has an advance book of around Rs 40,000 crore as of now, aims to grow it to Rs 60,000 crore by end of March, 2011.

“Though overall credit growth in the first half of the year was around 12 per cent, we hope to attain a 25 per cent growth in advances by the end of this fiscal,” A S Bhattacharya, chairman and managing director, Bank of Maharashtra, said.

We have already sanctioned around Rs 14,000 crore that will be disbursed shortly, he added.

 

However, the newly appointed chairman is hopeful of reducing both gross and net non-performing asset ratio in the second half of the year.

“We hope to reduce our gross NPA to less than 3 per cent from present 3.58 and net NPA to 2 per cent from 2.18 per cent by end of this fiscal,” he said.

The bank had witnessed a drop in its net profit by 39.68 per cent to Rs 52.3 crore during second quarter of this fiscal on the back of higher provisioning for NPA.

Referring to profitability, he said that second half of the fiscal would have better numbers as compared to first half of the fiscal.

“Net interest margin is expected to be around 2.7 per cent from 2.54 per cent for the period-ending September,” he said. Though our cost of deposits will increase from 5.24 to 5.30 by March, NIM will be higher on the back of higher yield on advances, he added.

The bank is also expected to pose a sound growth in CASA ratio in overall deposit to 41 per cent from 39 per cent as of now. “We want to increase our overall business to Rs 1,20,000 crore, 20 per cent growth over present Rs 1,00,000 crore,” he added.

The bank, which has received Rs 580 crore from government as part of the capital infusion plan, is expected to receive another Rs 800 crore by the end of this fiscal.

“Our capital adequacy ratio of around 14 per cent iscomfortable to grow our loan book. Additional capital infusion will further our business growth,” Bhattacharya said.

He also said that it would invest in technology to attract youth in the near future.

Bank of Maharashtra has 1,508 branches as of now that will be expanded to 1,532 by end of this fiscal, he added.