Corporation Bank eyes 25% loan growth in FY11

Corporation Bank eyes 25% loan growth in FY11

Mumbai: State-run Corporation Bank expects loans to grow by a quarter and deposits 22% in 2010-11 on demand from retail and infrastructure sectors, a top official said on Friday.

The lender, with a capital adequacy ratio of 15.37% as on 31 March, plans to seek government approval in September quarter to raise about Rs3,000 crore via rights issue or a follow-on public issue, J M Garg, chairman and managing director, told reporters.

“We expect a credit pick-up in the retail segment. Demand is also expected from infra sectors like roads, power and ports. We also expect demand from capital goods and pharmaceuticals."

The Mangalore-based bank has no plans to raise lending rates in the June quarter as it has sufficient liquidity to meet loan growth targets in the first quarter, Garg said.

Earlier in the day, the lender lagged analyst estimates to post a 20% rise in January-March net profit to Rs312 billion crore, against a Reuters poll of brokerages estimate of Rs334 crore.

The bank took a mark-to-market loss of Rs610 million in the quarter ended 31 March.

Net interest margins expanded to 2.5% in the quarter, from 2.19% a year ago, while the net bad loans rose to 0.31% from 0.29% a year ago.

Slippages from restructured assets in 2009-10 was at Rs142 crore, he added.

Shares in the bank ended down 0.37% at Rs498.75 in a firm Mumbai market that ended up 0.68%.