Vijaya Bank in retail thrust

Retail lending will account for 50 per cent of the total advances of Vijaya Bank by March 2005, according to M S Kapur, the bank's chairman and managing director.

Kapur said the bank currently has a retail lending portfolio of Rs 2,400 crore, of which Rs 1,000 crore is from housing finance.

At present, the bank's retail book comprises 25 per cent of the total advances. Vijaya Bank, a public sector bank, is slated to tap the capital market on October 9 with a Rs 240 crore public issue.

"We are going to increase our delivery channels by increasing the branch network to 1,000 from the current 845. We will have 100 ATMs by the end of this December and we will be on of the four public sector banks to implement the 'core banking solution' which will enable us to manage the risks better. Once this is ready by next year, we will be like any other new-generation private sector bank," Kapur said.

The bank, which claims to have the lowest non-performing assets (NPAs) among the public sector banks, hopes to reduce bad loans further by March 2004. As on March 2003, the bank's NPAs stood at 2.61 per cent of the total advances.

"Our NPAs in the retail segment are much lower at 1.5 per cent. That is why we are focussing more on retail segment. Our experience in retail lending shows that it makes sense to focus on this segment even from the point of returns," said K Ratnakar Hegde, general manager (credit).

"Our overall advances grew by 27 per cent last year, which is highest among the public sector banks. This year they may grow at a rate of 30 per cent. We have many innovative retail products. We are also looking at improving non-interest income as a means of increasing profitability," Hegde added.