Though rates have shown an upward bias, state-owned lender Indian Bank, with a surplus liquidity of Rs 30,000 crore, is targeting bigger net interest margin (NIM) of 3.71% in 2010-11.
Speaking to FE, TM Bhasin, chairman & managing director, Indian Bank, which was once severely hit by a huge amount of sticky assets, said the bank has witnessed recoveries of more than Rs 500 crore of sticky assets last fiscal and expects a similar amount of recoveries during this financial year.
?The bank has already fully provided against doubtful assets. Any recovery of loss assets against which we have already provided will help increase the income of the bank. We are looking at a growth in our non-interest income to 20% this year against 13.31% in 2009-10. All this would hugely contribute to maintain bigger spread and profitability,? said Bhasin.
The bank has a capital adequacy ratio of 12.71%. Hence, the bank does not have any plan to raise capital in the current fiscal, he said. Total business of the bank is likely to record a 30% growth to Rs 1,85,000 crore in 2010-11, from Rs 1,50,000 crore in 2009-10.
The net profit of the bank is also likely to go up by 37% to Rs 2,000 crore, from the existing Rs 1,544.99 crore.
The bank expects its credit to grow by 22% in 2010-11 from 20.89% in 2009-10. The bank plans to grow its deposits by 22% in the current fiscal, against 21.56% in 2009-10. Also, it sees a marginal increase in its current account & saving account (CASA) to 34% by the end of the fiscal, as against 32.9% in 2009-10.
On a similar footing, the bank plans to sustain its net non-performing assets (NPA) at its current level of 0.23%, by the end of this fiscal. The bank currently has a customer base of 2.16 crore and eyes 2.75 crore by the end of the fiscal. The yield on investment of the bank has come down to 7.03% in 2009-10 against 7.8% a year ago.
?We will be able to keep its yield on investment within the range of 7% despite the hardening of yields,? he said.