While the country’s banking sector has been witnessing an upsurge in NPAs, state-run Canara Bank is hoping to bring down its gross NPA ratio to 2.5% by this fiscal-end. The Bangalore-based lender’s gross NPA ratio stood at 2.79% for the third quarter in the current financial year and net NPA ratio was at 2.39%.
“For the whole banking industry, asset quality is a concern. Gross NPA ratio for the industry varies between 5-10%. But for us it is only 2.7%. And we are hopeful that by March we will bring it down to 2.5% or maintain at 2.6-2.7%, which is the best in the economy,” Canara Bank chairman and MD RK Dubey said on Monday evening.
The public sector bank witnessed a marginal deterioration in its asset quality during the December quarter of 2013-14 compared to the same period last year.
While its gross NPA ratio stood at 2.77% in the third quarter last fiscal, net NPA ratio was at 2.35%.
Significantly, it was mainly higher provisioning for NPAs, which dragged Canara Bank’s profit for the third quarter down 42.38%.
The CMD, however, said in the last one year, a lot of technology initiatives were taken by his bank and that helped its credit grow by about 30%, where the industry’s growth rate was only 14-15%. He said although the bank was cautious on corporate lending due to subdued market conditions, its focus was on retail loan portfolio growth.
“Our bank performed well in housing as well as vehicle loans during this period,” he maintained.
The bank said it was planning to open more branches in unbanked rural areas in the states such as West Bengal and Odisha. According to Dubey, the bank, which at present has a customer base of 5.80-crore, will have 6 crore customers by March, 2014.