To maintain NPAs (non-performing assets), improve recovery level and ensure more business in present tight economic conditions, Manipal-based Syndicate Bank is eyeing mid-corporate, retail and SME (small and middle enterprises) segment. The Bank which posted 31% decline in its net profit for the quarter ended March 31 is expecting to grow by 20% this year.
In an interview with Shashikant Trivedi, chairman and managing director of the bank Sudhir Kumar Jain said the bank expecting Rs 6,000 crore through mid-corporate segment. Also the bank will use the capital-raising tool QIP (qualified Institutional placement) during second half of this year: Excerpts:
Market conditions do not bode well for bankers, monitoring of stressed accounts is a big issue and your bank is no exception to it. How will you deal with it?
We have set up START or Stress Asset Recovery Team which will target all accounts below Rs 10 lakh and will function in all regions. We have also strengthened our recovery department by appointing separate top level officers who will personally monitoring these accounts.
Separate officers are there to look after only SRFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act) accounts. Few other officers have been deployed to personally monitor all individual accounts of Rs 25 lakh. We also have created SME department and devised a system to monthly monitor all accounts above rupees one crore. This way we will monitor stressed accounts. All these steps will help us contain our NPAs.
But at the same time you have to perform and maintain growth…
…Yes, which is why we are focusing more on mid-corporate, SME and retail segment. We have now opened thirty new mid-corporate branches. For example we have opened two new mid-corporate branches in Madhya Pradesh one in Bhopal and other in Indore. I am personally visiting all regions to explore possibilities. There is a huge potential in the segment.
What is your target?
As I said I am personally meeting customers of various segments. We will be able to do a business of not less than Rs 6,000 crore this year from mid-corporate segment.
Are you focusing on power and infrastructure projects?
There are no new power projects coming up in the country due to various reasons. Also new infrastructure projects have also stuck up as a result we are choosy while considering new project funding. We are soon funding some good road projects provided they have cent-percent right of the way.
What about educations loan? The segment will remain unimpressive?
…We are aggressive in education loan too if subsidies are offered by government we are more aggressive like in state of Madhya Pradesh. We have set up an annual growth target of 15% over the previous year.
Will you also tap potential in non-banking areas like financial inclusion?
We have more than nine hundred ultra small branches to be aggressive in financial inclusion. We have covered 2,248 villages of 2,000 population and have opened nearly seventy lakh basic accounts in various rural areas. We have good presence in financial inclusion programme.
How do you position your bank post elections?
If any stable government comes with complete majority, we expect the economy to look up and things will start moving ahead. Last year we have grown by 18%. This year we have set up 20% growth target.
And you will raise funds through market too?
Yes we have QIP government approval for Rs 200 crore but we will wait for an appropriate time. Our capital adequacy ratio is quite comfortable at 12.01% and our tier-I is 8.99%, so we will wait till our share price will reach to an expected level. We will raise funds in the second half of the year by September.