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Manipal-based Syndicate Bank has set an ambitious target of 25% growth in the overall business for 2013-14 as compared with 18.1% growth it had achieved in the last financial year.
"The government is expecting higher economic growth rate in the current year. Going by these projections, we believe that 25% growth in our business is possible. However, it all depends on how the economy and the industry plays out when it comes to large corporate advances," said M Anjaneya Prasad, executive director of Syndicate Bank, here on Monday.
It had joined the club of A-category banks after surpassing the Rs 3-lakh crore business mark in December, 2012. This, coupled with lower NPA levels and the hope for a better performance by the economy even in sectors like the real estate, is driving the bank to set ambitious goals for the current year.
Responding to a question, Prasad even said the present interest rates would not be a problem in achieving the targets if the economy performs well.
In the financial year ending March, 2013, the bank achieved a 19% growth in advances (Rs 1,49,423 crore) and 17.4% growth in deposits (Rs 1,85,356 crore) while net interest margin (NIM) slightly came down to 3.19% from 3.43% as at March, 2012 as the margin between the yields and cost of funds narrowed to as low as 1.25%, according to Prasad. For the current year, the bank is targeting a growth of over 25% and 24% in deposits and advances respectively.
As the interest rates on deposits are expect to stay higher for some more time, the bank's endeavour will be to protect the NIM of at least 3% for the full year, he said. Unlike several of its peers, the bank's gross non performing assets (NPAs) and net NPAs had come down to 1.99% from 2.53% and to 0.76% from 0.96% respectively as at the end of March 2013.
According to Prasad, the bank is focusing on expanding housing loans in the retail segment as the growth in gold loans, which grew 76% to Rs 6,000 crore last year among other retail segments, had already shown encouraging performance. He also said the real estate sector was doing well and the bank had taken a decision to provide loans to projects with requirement of between Rs 20 crore and Rs 50 crore.
To raise $ 500 million
Prasad, meanwhile, said the Reserve Bank of India was considering their request for approval to raise $500 million through medium term notes (MTN). According to him, a decision in this regard is expected in a month.
