Speaking to reporters over the ongoing ideation process by the PSBs, especially in Tamil Nadu, Karnam Sekar, MD & CEO of IOB, said from the June quarter the bank was hoping to hit profitability.
Reiterating that the bank is on the right track to bounce back to black, the loss-making Chennai-based public-sector lender Indian Overseas Bank (IOB) on Thursday said increased recovery coupled with growth in retail, agriculture and MSME (RAM) loan book hold key to report profitability.
The bank said it has to speed up the recovery and look for a 10% growth in loan book to non-corporate segment. IOB, however, refrained from putting a timeline for the same, though it had earlier said it would hit profitability in Q2FY20.
Speaking to reporters over the ongoing ideation process by the PSBs, especially in Tamil Nadu, Karnam Sekar, MD & CEO of IOB, said from the June quarter the bank was hoping to hit profitability. Things were going on the right track with the bank being able to keep the RAM slippage under control. The situation is now that the bank could make recovery in every quarter more than the slippage.
“We have a total of Rs 90, 000 crore portfolio towards RAM sector put together and typically around Rs 300-350 crore slippage happens. We were able to contain RAM slippages and raise the recovery levels,” he said.
Sekar said the bank’s bouncing to black depends on how much it recovers at what haircut. In the NCLT cases, the bank does not have much say as its exposure is small and needs to go along with CoC. He further said in the case of other recovery processes such as one-time settlement and sale of property, the bank is seeing good progress.
The current slowdown will not hamper the initiative of the bank to step up the advances in RAM segment. “For a bank like us which has a small balance sheet, it does not matter. To have a 10% growth in advances, we need to give just Rs 10,000 crore to Rs 15,000 crore only and that we can manage by granting housing, MSME and jewel loans through our 3,300 odd branches”, he said.
Elaborating on the ongoing ideation process, Sekar said they are contemplating ranking of branches of different banks which are operating in the same geographies to find out how similarly or differently they perform in a similar ecosystem. “We, at the state level are trying to find out how the branches perform at particular geography and banks can learn from each other, and better the performance,” he said.