Federal Bank chief executive officer & managing director Shyam Srinivasan spoke to the media about the bank’s performance in Q4. Excerpts:
Last quarter, you said that the bank is sacrificing growth for asset quality. When are you looking at growth again?
Well, they are not conflicting objectives. As far as growth in SME lending is concerned, we would probably rank among the top 3-4 players in the country. That is about a 35% growth in SME. Likewise, we activated the retail portfolio recently. As far as large corporates are concerned, we are looking for political stability and policy changes over the next few months. That will give us the confidence to grow.
Where does the large corporate loan book stand right now ?
On a year-on-year basis, the large corporate loan book moved from about R19,000 crore to slightly less than R14,000 crore. And that base has no one-offs or bulky increases. From there, it is poised for a calibrated growth. While we focus on retail and SME portfolios, we are certainly interested in building the right quality of business with large corporates. We have the risk appetite and the bank is well capitalised. But it will be entirely driven by the quality of credit.
Why are you looking to grow the SME portfolio given that other banks are cautious on the segment?
SME is too broad-based a terminology. At any count, there are about 45 million SME businesses in the country. So, neither are all of them bad nor are all of them good. It is about being selective and we have a large network today, with almost 1,050 branches across the country. We are strong in Kerala, Tamil Nadu and Maharashtra. We have a good local grip and, therefore, we are going for relationships that are established. Therefore, SME is not just one broad mesh.
Why was there a drop in the other income by 9.37%?
If you look at it sequentially, other income is up 14%. On a year-on-year basis, there is some aberration because market- related income varies with the interest rate scenario.