Vysya Bank Ltd (VBL), the Bangalore-based private sector bank, has forecast a sharp rise in credit offtake and net profit for the current fiscal.
K Balasubramanian, managing director, said the bank's deposits are seen growing marginally against last year at Rs 9,000 crore, while advances are expected to rise to Rs 5,000 crore against Rs 4,300 crore in the previous year. The impact of this would be a rise in net profit this year to Rs 70 crore compared with Rs 38 crore in the previous fiscal.
"Since the economy is not growing at the expected pace, we have taken the slow and steady route and our thrust is on quality loans," Balasubramanian said.
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Quality loans and reduced NPA will be the key to rising profits. He said the bank expects to clock a 25 per cent growth in the next 2-3 years. "We hope to bring down the NPA level to 3.5 per cent this year, compared with 4.7 per cent in the previous fiscal," Balasubramanian said.
Vysya Bank has, to this effect, set up a special team for speedy recovery of dues and one-time settlement in certain cases. The bank has also transformed the business of one of its subsidiaries, Vysya Bank Financial Services, to that of a corporate agency which will undertake insurance business for its insurance venture ING Vysya Insurance Life Insurance, once the corporate agency norm is through.
The outfit will provide a wide range of financial services including mutual funds and other banking products from the bank. The company has imparted training to around 20 Vysya Bank officers, who will be eventually absorbed into the financial service business.
The bank has drawn up a long-term policy, whereby it has divided its business into five strategic areas -- corporate, commercial, retail, rural and treasury. The focus is on medium-to-small clients and traders. The bank managing director said he hopes to derive a major portion of its business from this segment.
In a bid to expand its business, the bank has initiated a drive to rationalise its branch network. It will increase the number by 20 to 500 this year. Most of the expansion will be in the north, where it is not adequately represented, Balasubramanian said. It was in the process of opening another branch in the upmarket residential locality of Salt Lake in Kolkata.
Meanwhile, in a bid to provide a touch of colour to regular banking business, the bank has arranged painting exhibitions at a number of branches. Customers can now walk into select branches and buy paintings at affordable prices. One such exhibition was inaugurated today at the Rashbehari branch in Kolkata.