State-run Dena Bank is targeting a 20 per cent growth in post-tax profit this fiscal, over the Rs 551.6 crore in the previous fiscal.
"As the economy improves, we are expecting to increase the credit growth to 18-20 per cent and on the back of it, a growth of 20 per cent in the bottomline," executive director R A Takkar told PTI.
In FY14, the bank had registered a 15 per cent growth in advances and 13 per cent jump in deposits.
Takkar added that the bank is also targeting expansion of the Net Interest Margin (NIM) to 2.7 per cent level by concentrating more on the retail deposits.
The city-based lender reported NIM of 2.32 per cent for the March quarter, down from the 2.66 per cent it had reported in the year-ago period.
Takkar explained that one of the prime reasons for the dip was the surge in bad assets as the provisions for bad assets went up, while interest income was also driven down as the interest-generating assets went down.
He, however, added that the bank believes that the accretion of bad assets has peaked and henceforth, troubles will be contained.
Takkar also stated that bank does not have any chunky accounts running into hundreds of crores in bad assets. For the last quarter of 2013-14 fiscal, the biggest slippage for the bank was REI Agro at a little over Rs 100 crore.
When asked if the bank, which acts as the head of Gujarat's state-level banking committee, will benefit under the new Modi government, Takkar said changes in the government do not have any impact on the state-run lenders.
The bank has sought a capital infusion of Rs 1,200 crore from the government for FY15 to cement its core capital base, which has gone below the 8 per cent mark.
As the promoter holding is at the 58 per cent level, the bank will have to get a capital infusion from the government first and then go for a dilution or go for a rights issue where government subscribes to maintain its holding.
