Public sector lender Allahabad Bank is looking to reduce its exposure to corporate lending from 65 per cent of its total loan book to 50 percent for risk mitigation, its MD and CEO Usha Ananthasubramanian said on Wednesday. “There is a shift happening (in loan portfolio). We have a heavy corporate book. We want to re-balance the loan book.
“The loan book break-up is 65:35 (65 percent corporate and 35 per cent retail), so we want to improve it to 50:50,” she said, adding: “We will be very selective in corporate loan sector-wise, rating-wise and at what form of guarantee will come.”
On big-ticket corporate lending, Ananthasubramanian said: “We will be choosy in those loans in terms of geography, sector and rating. In certain sectors, we may be breaching the cap, so we cannot go on and increase our exposure there.
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“Maybe, there are some sectors, where we have not much exposure, but we are doing well, there we want to grow lending.”
She however did not specify the time line by when rebalancing would be achieved.
Ananthasubramanian also indicated the bank would rationalise some of its branches.
“We may go for rationalising of some branches and may not go for aggressive expansion. Last year, we had merged eight branches in Kolkata… we have started spotting those kind of branches where we can have a merger,” she said.
She said the bank would focus on aggressive recoveries of non performing assets (NPAs), re-balancing of loan books from high risk corporate book to diversified book. She also said the bank could require Rs 2,000 crore of capital infusion in the current fiscal.
The bank on Monday posted a net profit of Rs 111.16 crore in the quarter ended March 31, 2017 as compared to a net loss of Rs 581.13 crore in the year-ago period. It, however, narrowed its loss at Rs 313.52 crore in 2016-17 as against a loss of Rs 743.31 crore in the previous fiscal.
Capital adequacy ratio stood at 11.45 percent as March 31, 2017 as per Basel III norms.
The bank’s gross NPA stood at 13.9 per cent and net NPA 8.92 per cent as on March 31, 2017.