What sectors are you focusing on to push loan growth? What is your target for advances growth in FY14?
In line with our policy stance, we are all set to record the targeted growth in our loan book for current financial year. Strategy is to continue focus on J&K with thrust on key sectors like agriculture, horticulture, tourism, hydel power and handicraft. Outside the state, we will concentrate on expanding our corporate loan book and capitalise on SME lending especially in smaller cities.
Besides, keeping in mind the slowdown and challenges in the economic and business environment, the bank will be selective in extending project finance assistance.
The bank is targeting a loan portfolio of R50,304 crore by the financial year ending March 2014 so as to register a growth of over 25%.
J&K Bank?s asset quality has been stable, but the industry as a whole is still reeling under asset quality issues. Do you see any threat to your asset quality in the coming quarters?
Banking industry is reeling under tough times mainly on account of the extended slowdown; this not only put stress on the asset quality of banks but has also challenged overall business growth. Despite this we have managed to grow as per the set targets. At the same time, we have also been selective in our credit decisions which has given us comfort in terms of asset quality, stability and yield.
What is your estimate for the total restructuring conducted by the bank in Q1? Will you see your restructuring coming down in the coming quarters?
Restructuring is a fallout of the prolonged recessionary environment globally and slowing down of economy nationally. Banks play a vital role to help otherwise viable units to come out of the temporary difficulties by offering restructuring packages. Our stable asset quality has helped us on this front also; percentage of outstanding restructured amount vis-?-vis outstanding credit as on March 31, 2013, was 3.80% against 4.07% last year and against industry average of over 5%. In the first quarter of the current fiscal, we have restructured some accounts but not substantial in amount. We have also been able to bring down the restructured amount during this quarter through accelerated repayments.
Which are the sectors you are cautious about lending to in the current environment?
Over the past couple of years, the banking sector has displayed a high level of resilience in the face of high inflation, rupee depreciation and uncertainty in the US and Europe. High interest rates, subdued industrial production and domestic consumption impacted the growth of the Indian economy which slowed down from 8.4% in FY11 to 6.5% during FY12 and further around 5% in FY13. Taking into consideration overall economic conditions and credit scenario we have been selective in credit decisions especially in sectors like capital market exposures and power sector (thermal) due to various sector specific issues. However, in these segments we are cherry picking so as not to miss good opportunities.
J&K Bank Q4 net profit was up 20% at R250 crore. How will Q1 look in terms of bottomline growth?
The not-so-favourable economic conditions notwithstanding, we are confident to present impressive figures in the coming quarters, including Q1. Though it is too early to share the exact Q1 numbers at this stage, I can assure you the results would be as per the planned trajectory and growth momentum.
