Corporation Bank eyes 25% credit growth, 22% in deposits in FY12

MUMBAI: Public sector lender, Corporation Bank, is expecting a credit growth of 25 per cent and deposits to expand by 22 per cent in 2011-12, a top bank official said.

"According to my estimates, our deposit growth will be around 22 per cent and credit growth 25 per cent (in FY 12)," the Managlore-headquartered bank's Chairman and Managing Director, Ramnath Pradeep, told reporters on the sidelines of an event here today.

The bank will be focusing on the retail, micro small and medium enterprises, and agriculture to achieve the growth, Pradeep said, stressing that an economy projected to grow at 8.5 per cent requires a ramp-up in lending. The bank's zonal heads would be meeting here over the next two-days for arriving at an exact target on the two critical parameters, he said.

When asked if the bank will emulate its peers like Oriental Bank of Commerce and cut its deposit rates, Pradeep said, "any revision in either deposit or lending rate will happen only after the RBI's policy (on May 3)...right now we don't find any need to."

On his expectations from the RBI in its annual policy statement, Pradeep said the runaway inflation number is showing some signs of cooling-off which is a comforting factor but did not comment on a specific direction the central bank will be taking.

Corporation Bank is not looking at any fund-raising in the near future as a recent infusion of Rs 300-crore has resulted in a comfortable capital adequacy ratio of 15 per cent, Pradeep said. To a query on the bank's exposure to the micro-finance institutions (MFIs), Pradeep said it currently stands at Rs 700-crore and all the loans are performing well.

However, in wake of lenders going for a restructuring through the CDR route, Pradeep said before the bankers restructure their loans, the MFIs should also restructure the beneficiary accounts and also insisted on personal guarantees to be given by the promoters.

Source: EconomicTimes