SBM to see 20% credit growth in '11

Bangalore based public sector lender, State Bank of Mysore (SBM) is hopeful of achieving 20 per cent credit growth by the end of this financial year on the back of higher credit off take in the last quarter.

The bank has witnessed a credit growth of around 16 per cent to Rs 32,532 crore during the third quarter of the financial year.

“We are hopeful of attaining a credit growth of 20 per cent by end of March, 2011 on higher credit off take during the last quarter,” Dillip Mavinkurve, managing director of State Bank of Mysore said.

He is also hopeful of deposit growth in the rest of the financial year. Deposit growth of the bank has registered a 10 per cent rise to Rs 39,575 crore during the period.

 

“Deposit growth has been tepid during the last quarter. However, we expect it to pick up in the fourth quarter,” he added.

The bank, which has seen margin improvement in this quarter, sees some kind of pressure in the January-March period.

“During the last quarter, we see some kind of pressure on the NIM due to the overall liquidity situation in the system. However, NIM will be higher than three per cent for the whole financial year,” he said. Meantime, the bank has witnessed a sharp rise in its gross and net non-performing asset (NPA) during the third quarter.

While net NPA increased to 1.47 per cent in this quarter from 0.89 per cent an year earlier, gross NPA also witnessed an increasing trend to 3.20 per cent from 1.92 per cent registered last year.

“There is no concerns with relation to asset quality. Higher provisioning is due to farm loan waiver and some of the corporate accounts turning NPA,” he added. On the provisioning front, the bank has a provisioning ratio of around 65 per cent by the end of December, 2010.

“We are hopeful of increasing the provisioning ratio to 70 per cent as stipulated by RBI by the end of March, 2011,” he said. It has also witnessed a CASA growth of 27 per cent over the last year, he added.