Chanda Kochhar: Retail, corporates to drive domestic growth
Where is your credit growth coming from and how will it change?
We have the capability to grow a little faster than the industry average. Industry is currently growing at 16% and our domestic advances are growing at 20% and I see this continuing for the next few quarters. We expect to see about 20% growth in the domestic business and I think this will be equally divided between the retail and the corporate business. Our corporate business is already growing at about 20%, retail business growth has reached 17% now and we expect that to reach 20% as well. In the overseas business growth will be calibrated as per the market. That is why you have seen that our overall growth has been 16%.
Have you seen a pick up in demand from corporates to finance new projects?
No, the growth is mainly on account of working capital or disbursement for the existing projects. We have not really seen a pick up in demand from new projects as yet. As of now there is demand for working capital and from projects that are reaching commercial operations where companies refinance the debt since implementation risks are over. There is also some substitution of rupee loans by foreign currency loans since they are much cheaper.Finally, there is also the disbursement taking place from the project loans that have already been sanctioned.
Do you see any kind of pressure on you NIMs?
If you look at our net margin interest of 3.07%, the domestic NIM is 3.47% and the international NIM is 1.3%. On the domestic side the NIM remains stable whereas on the international side there is scope for improvement because gradually we will be putting our excess liquidity to use. Overall, we will definitely maintain the NIM and work towards increasing it slightly.
Have you taken a call on your interest rates following the credit policy?
We didn’t had ALCO meeting after the policy announcement. Last April, when policy rate was cut, we were among one of the first banks to cut our base rate. We believe whenever it is possible we must give benefits to our existing customers.
Will we see lot of restructuring coming from the corporate side in the coming quarters?
I have always been saying that on the corporate book we have to watch project by project and company by company. So, some companies or projects will have stress but that does not mean that the overall quality is at a risk. If you see this quarter even our restructured asset number has been pretty stable. In some quarters you will have some addition to NPAs, you will have some additions to restructured assets. But none of these are really the numbers that are alarming At the end of FY2012-13 our additions to restructured assets will be lower than the additions in FY2011-12.
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