Mumbai: State-run IDBI Bank has sought Rs10,000 of capital from the federal government to fund loan growth in the next 3 years, its top official said on Friday.
“We have asked for one-third the amount (of Rs10,000 crore) in the current year,” chairman and managing director Yogesh Agarwal said.
The federal government owns 52.7% in the bank and the additional capital from government would give the lender headroom to raise more funds to support future growth, he said. The lender is targeting a credit growth of 25-30% in the current year, mainly from infrastructure and medium businesses, and expects net interest margins to rise 20-25 basis points in 2010-11, Agarwal said.
The bank also plans to open 300 new branches in the current year as credit demand picks up with rise in business confidence, he said.
“We are targeting higher share of low cost deposit for better cost management.”
The bank is aiming to raise the share of low cost deposits to 20% of total deposit in the current fiscal from 14.59% now.
It expects retail lending rates to rise by end of June quarter with pick up in credit demand, he said.
Earlier in on Firday, the bank posted a marginal rise in March quarter profit to Rs318 crore, up from Rs314 crore a year ago.
It lagged Reuters brokerage estimates of Rs356 crore for the quarter mainly on account of higher provisions of Rs376 crore, up from Rs170 crore a year following rise in bad loans to 1.02%, from 0.92% a year ago.
IDBI’s loans rose 33.6%, while net interest margin was at 1.28% in FY10.
IDBI shares ended 5.44% up at Rs125.95 in the Mumbai market that was up 0.32%.