IDBI to bolster loan book by Rs 26000 cr

Industrial Development Bank of India (IDBI) plans to increase its loan portfolio by Rs 26,000 crore in 2005-06, to take its total assets beyond Rs 1,00,000 crore.

IDBI sees the loan portfolio of its commercial banking unit increasing by Rs 10,000 crore and project and corporate loans by Rs 16,000 crore by the end of March 2006, bank chairman V P Shetty said after inaugurating the Mumbai main branch at IDBI Towers.

The asset size of IDBI after the merger of IDBI Bank effective April 2, 2005, has grown from over Rs 65,000 crore to over Rs 80,000 crore.

Shetty said the merger of IDBI and IDBI Bank "would stand us in good stead in our quest for market shares in the intensely competitive financial system and facilitate our passage to the upper echelons of the emerging financial architecture in India."

The merged entity's network has increased to 163 branches. IDBI now wants to open another 100 branches in 2005-06.

In 2004-05, non-project finance or corporate loans accounted for nearly 60 per cent of the total sanctions, with IDBI getting aggressive in non-project finance after its conversion into a banking company.

The bank's borrowings are budgeted to increase by about Rs 10,000 crore to Rs 25,000 crore, including Rs 10,000 crore of resources through issue of Flexibonds and Omnibonds.

Shetty said IDBI's total business, including assets, borrowings and deposits, will rise to Rs 1,50,000 crore from Rs 1,30,000 crore.

IDBI chairman said he doesn't expect firming up of interest rates in the medium term, but expects yield on 10-year government securities to rise by 25 to 50 basis points if inflation rises.