State Bank of Mysore may downsize debt raising plan

Bangalore-headquartered public sector lender State Bank of Mysore (SBM) may downsize its fund raising plan through bonds this fiscal due to slow growth in advances.

Earlier, the State Bank subsidiary had planned to raise around Rs 500 crore this fiscal through tier-II bonds.

"We will take a view about the size of the issue in the fourth quarter. As there is slow growth in credit in the first half, it may not be Rs 500 crore as planned initially," SBM Managing Director Dilip Mavinkurve said.

However, he said the bank had witnessed pick-up in credit growth in the first two months of the second half of the fiscal.

By the end of September, gross advances rose 15% to Rs 35,941 crore against the same period last year.

"In the ongoing quarter, agricultural advances are showing some momentum. Also, a lot of sanctioned loans are likely to be disbursed. So, we are hopeful of closing this year with a 16-18% credit growth," Mavinkurve said.

Referring to non-performing asset (NPA), he said the bank had seen stress in sectors like steel, textiles and power along with small retail loans.

In the second quarter, gross NPAs rose to 3.72% from 3.12% in the year-ago period, while net NPAs were 1.82% against 1.48% in the same period last year.

The bank posted a net profit of Rs 77.78 crore, down 17% for the second quarter of this fiscal compared to Rs 93.36 crore in the corresponding quarter of last year.

Source: Business Standard