CanBank may keep momentum in Q4

Bangalore-headquartered public sector lender Canara Bank is hopeful of maintaining the growth momentumoin the advances front in the fourth quarter of the present financial year.

During the third quarter, the bank has witnessed a 29 per cent growth in credit to Rs 189,882 crore on the back of sound growth across portfolio. ?We expect to maintain the momentum in the last quarter as our deposit growth is healthy to have any concern regarding incremental credit deposit ratio,? S Raman, chairman and managing director of Canara Bank said.

The bank witnessed a deposit growth of 25 % in the third quarter to Rs 263,497 crore and has a credit deposit ratio of 73 % by end of December, 2010.

?As our credit and deposit have grown in tandem, there is no requirement of restricting the credit growth,? he added. Recently, the central bank has expressed its concern regarding low deposit growth rate in the system as compared to advances and seek a moderation in credit growth.

The central bank was concerned about the incremental credit growth rate as many banks borrow from the repo window to lend it to customers.

Referring to segmental growth, he said the bank had witnessed a sound growth in infrastructure lending along with the housing loan segment.

While the housing loan segment rose 70 % to Rs 28,949 crore, its infrastructure lending portfolio stood at Rs 41,000 crore. ?We don?t see any possibility of an asset-liability mismatch due to infra lending as our overall CASA portfolio stood at Rs 76,000 crore,? he said.

He also said that of the total infra lending portfolio, Rs 10, 000 crore were short-term loans. In the retail segment, the credit growth was 35 per cent at Rs 28,949 crore with a credit growth of 24.3 per cent in the MSME segment.

?Delinquency levels have gone down in most of the advances with a recovery of Rs 1,200 crore during the first nine months of the present fiscal,? he added.

On the NPA front, the gross NPA fell to 1.44 per cent from 1.77 per cent and net NPA has seen a decline to 1.05 per cent from 1.34 per cent an year earlier. Provisioning coverage ratio stood at 75.91 per cent against 70 per cent mandated by the central bank.

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