Axis Bank, the country’s third largest private sector lender, plans to take the share of retail credit in its overall loan book from the current 24 per cent to 30 per cent in the next 2-3 years.
“On the retail asset side, we have a very strong growth in housing and auto segments. In both these segments, Axis Bank has been growing higher than the national average,” said R K Bammi, executive director (retail banking), Axis Bank.
Banks were betting on retail loan segment to drive credit growth following one per cent cut in Statutory Liquidity Ratio (SLR) to 23 per cent by the Reserve Bank of India (RBI) in its last policy review in August.
Asked if Axis Bank expected the RBI to slash key policy rates in its next review meet, Parthasarathi Mukherjee, president (treasury and international banking) said, “The economy is still facing a slowdown. RBI is battling both slowdown and inflation and it has to finetune a balance between the two.”
The private sector lender, however, is concerned about slowing long-term credit demand from the corporate sector.
“There is a general feeling that new projects from the corporates are slowing down. Infrastructure is particularly affected because of policy issues. Pharmaceuticals is one of the very few sectors that has been somewhat immune to the meltdown,” said Mukherjee.
The bank maintained its net interest margins (NIM) have not been impacted because of the slowing economy.
“We don’t give guidance on how NIM margins will be growing in the future. But, our NIM has been in the range of 3-3.5 per cent,” Mukherjee informed.
The private bank is also expecting a healthy growth in its current and savings accounts (Casa) deposits.
“In 2011-12, we logged a growth of 41 per cent in Casa deposits. This fiscal too, we expect to maintain the same growth tempo,” said Bammi.
On concerns about rising bad debts of banks, Bammi said, “That is not an area of concern for the Axis Bank as our asset quality is very good. Our NPA (non-performing assets) is also amongst the lowest in the industry.”
In the April-June quarter, the bank’s net NPA increased to 0.31 per cent from 0.25 per cent in January-March quarter. Similarly, gross NPA , too, rose to 1.06 per cent as against 0.94 per cent sequentially.
Commenting on the bank’s expansion plans in Odisha, Bammi said, the bank had firmed up plans to open 12 new branches in the state in the current fiscal. Five of these branches would be set up in un-banked locations while the balance seven would come up in rural areas.
On a pan-India basis, Axis Bank boasts of over 1,700 branches, including 62 in Odisha and a network of over 10,500 ATMs. The bank intended to add around 5,000 new ATMs across the country in this fiscal.
