With total assets in excess of Rs 15,500 crore, Exim Banks chairman and managing director TC Venkat Subramanian, said that the institution is focussing on health, education and agri-exports to strike new export finance opportunities internationally.
Exim bank will raise Rs 3,800 crore in foreign exchange and balance over Rs 3,200 crore in domestic rupee this year, he indicated. Apart from developing countries, the institution is finding new opportunities in the developed countries also. Also for the first time the company has been rated by Moodys, Standard Poors and Fitch Ratings.
The growth in exports at 17 per cent in 2003-04 had a positive impact on performance with the sanctions and disbursement of Rs 9,266 crore (Rs 7,828 crore in 2002-03) and Rs 6,957 crore (Rs 5,320 crore). Loan assets grew by 23 per cent to Rs 10,775 crore in 2003-04 (Rs 8,774 crore), Mr Subramanian pointed out.
We expect a 25 per cent rise in net assets in 2004-05 as credit lines are utilised by clients in the current fiscal, he observed. Textile, construction, pharmaceuticals, engineering and metals sector were top five sectors in terms of credit assistance and the bank had diversified to provide credit facility to healthcare, entertainment and agro-products projects with substantial export potential.
Net non-performing assets as a share of net assets were down to 1.3 per cent as on March 2004 (2.3 per cent). The capital adequacy ratio stood at 23.5 per cent. The bank has extended 12 lines of credit for $168 million as on March 2004.
The Reserve bank of India (RBI) has given its approval to raise $300 million through external commercial borrowings (ECBs).
The bank is watching the market trends, including interest rates in US, and would plan the ECB in such a way that costs are least, N Shankar, general manager, Exim Bank, stated. The funds raised via ECBs would be used for medium term lending programme and hedged, based on currency and interest rate trends, Mr Shankar elaborated.
The incremental average cost of funds - domestic and overseas - has come down to six per cent as on March 31, 2004 from seven per cent last fiscal. On the issue of impact of dollar depreciation on India exports, a senior official of the EXIM Bank commented that of late, some 15 per cent of the export billing is happening in Euro.
First International To Pick 38% In GTF
Following the exit of Germany-based West LB from Global Trade Finance (GTF), Exim Bank is hiking its stake in GTF to 40 per cent. Another international institution, First International Merchant Bank is picking up over 38 per cent in GTF while Bank of Maharashtra (BoM) is buying another nine per cent in the institution.
The participation of First International Merchant Bank which owns London Forfaiting and BoM which funds the largest of small and medium enterprises in Maharastra will help GTF grow faster, says Exim Banks chairman TC Venkat Subramanian.