Bank aims to close present fiscal with a business of around Rs 93,000 cr.
Bangalore-based public sector Vijaya Bank is looking at a growth of 16-18 per cent in deposits and 20-22 per cent in advances for the current fiscal ending March 31, 2009. The growth for the bank under deposits and advances has been scaled down due to the impact of economic slowdown across the country, Albert Tauro, chairman and managing director, Vijaya Bank said.
Bangalore-headquartered Vijaya Bank aims to close the present fiscal with a total business of around Rs 93,000 crore. The bank is also planning to open 32 new branches, which would take the total branches to 1,068 by March 2009. The bank is also planning to set up a syndicated loan business.
The bank, which is hoping to get Rs 500 crore in the first tranche under the Centre’s recapitalisation package by the end of this fiscal, said it is planning to tie up with a corporate agency for selling insurance rather than foraying directly.
Speaking to reporters in Chennai on Wednesday, Tauro said the bank’s total business as on December 2008 stood at Rs 89,339 crore, of which deposits were around Rs 52,836 crore and advances Rs 36,503 crore. The total number of branches is 1,068.
The bank is hoping to close the current fiscal with a total business of Rs 92,000-93,000 crore and with 1,100 branches, by adding 32 new branches.
Bank’s focus for the coming fiscal would be profitability and capital build up. He noted that the net interest margin (NIM) during December 2008 improved to 2.35 per cent from 1.81 per cent. Net interest income rose 61 per cent in third quarter.
Speaking of the bank’s capital, Tauro said bank’s current core capital is to the tune of Rs 434 crore. Tier II capital is around Rs 2,239 crore and Tier III would be Rs 1,905 crore. Bank’s capital adequacy ratio (CAR), as on December 2008, was 11.40 per cent.
The government’s infusion of Rs 1,200 crore would help the bank maintain its CAR at the mandatory 12 per cent. The bank is hoping to get the first around of infusion, of around Rs 500 crore, by the end of March 2009.
The recapitalisation would continue till 2011 and would aid in raising tier-II capital.
Commenting on the current slowdown, Tauro said, it (the slowdown) has put some pressure on asset quality especially in the home loans and SME segments. The bank is closely monitoring the defaults and it is in the process of restructuring the segments including introducing technology and closely monitoring the accounts in these two segments.
He noted, the net NPA ratio stood at .73 per cent in December 2008, while gross NPA was 1.79 per cent. In terms of value it was Rs 263 crore and Rs 648 crore respectively.
The bank would focus on fee-based services, which stood at Rs 258 crore (including Rs 150 crore of treasury income), said Tauro.
Vijaya Bank, which exited from the insurance joint venture it had with Principal Financial Group of US, last year has decided to enter corporate agency. “Fow now, we would focus on corporate agency and would consider forming joint ventures or float own insurance companies at a later point,” said Tauro.
