The Mangalore based Corporation Bank has embarked on a strategy to create up to 25 per cent of its new assets through securitised deals and acquisition of retail and corporate assets from banks and non banking financial companies (NBFC).
"Securitised deals are the order of the day. This year we expect the figure to be to the tune of Rs 400 crore against our targeted total asset creation target of Rs 2,000 crore although our existing provision will allow us to create assets to a maximum of Rs 5,000 crore," explained the chairman and the managing director of the bank, K Cherian Varghese.
"We will primarily take over good quality assets from sound banks and NBFCs -- for both retail and corporate customers," he explained.
"Markets for blue chip and larger companies are a very competitive one and we don't think we are in a position to win over such clients, hence we will primarily look at securitising and taking over assets of mid-sized corporate clients that are likely to upgrade themselves to Triple-A rated customers," he added.
Varghese told reporters at the sidelines of a press conference to announce the launch of a bancassurance product, Corp Jeevan Raksha from Life Insurance Corporation of India (LIC), that the bank was "open to takeover if we find one worth taking over, but we are not actively looking at any possible takeover targets. With competition hotting up in every sector consolidation is the order of the day and every bank is looking forward to it."
Corporation Bank's net NPA was only 2.31 per cent and it hoped to recover Rs 30 crore from 45 accounts through the recently constituted Securitisation and Financial Reconstruction Ordinance. "The board in a recently held meeting has delegated appropriate power and authority to a senior level functionary for recovering dues through the Ordinance," Verghese said.
On the business front, Corporation Bank has targeted a total deposit base of Rs 21,000 crore -- a 20 per cent rise over last year's Rs 18,500 crore. Targeted growth in advances was pegged at 20 per cent against Rs 9,500 crore in the previous year.
In the housing loan segment it has targeted a 100 per cent growth in business at Rs 1,260 crore. "We have already achieved Rs 920 crore till date," informed Varghese.
The bank is also on an expansion spree whereby it will be opening 100 automated teller machines and extension counters at LIC premises. It will also increase the total number of ATM from 450 to 500 by the end of the current fiscal.
