Expect 18-20% credit growth in FY12: Vijaya Bank

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Expect 18-20% credit growth in FY12: Vijaya Bank

In an interview to CNBC-TV18, HS Upendra Kamath, chairman of Vijaya Bank says, he expects 18-20% credit growth in FY12.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Vijaya Bank See previous management interviews See what other Experts & Brokerages are saying about Vijaya Bank Vijaya Bank BSE | NSE 29/05/12 Are Mutual Funds betting on Vijaya Bank?

In an interview to CNBC-TV18, HS Upendra Kamath, chairman of Vijaya Bank says, he expects 18-20% credit growth in FY12.

Below is the edited transcript of his interview with CNBC-TV18's Sonia Shenoy and Gautam Broker. Also watch the accompanying video.

Q: What kind of credit growth do you think Vijaya Bank can eek out for the fiscal, given the kind of constraints that we have seen in the year gone by?

A: As on 31st December 2011, we have reached a level of Rs 55,850 crore of credit portfolio. It translates into year-on-year growth of about 28.2%. Over March annualised growth works out to 18%. That is in sync with the guidance given by RBI on credit growth, which they have tapered from 19% to 18%.

Going forward, in Q4, we estimate that our annual credit growth over March 31, 2011 would be anywhere between 18-20% by the time we close the year as on March 31, 2012. This compares fairly well with the current numbers which are out as on December 16. At the macro level, the credit has grown at 17.1%. I am sure it will go up slightly in the numbers as on December 31, 2011 public for the industry as a whole.

Q: Have you had a chance to look at the RBI's guidelines for Basel 3?

A: Yes, they have just been announced. The capital requirements of the banking industry would go up. We have all made the study of what would be our capital needs to fall in line with Basel 3. We have shared those details already with the ministry and the regulators as well.

Q: Do you think they are a bit more stringent than you would have expected? Will this be a slight drag on all of the PSU banks put together?

A: They are, by and large, on expected lines. We were aware that the common equity and the additional buffer etc were to come. We were all factoring for this. We have taken them into account in our capital planning.

Q: To meet it, how much will Vijaya Bank have to raise by FY15?

A: Actually till about 2014 we will be able to manage on our own. But from 2014 onwards, year-on-year, we will keep requiring additional capital. We have shared the details of that already with the ministry.

Q: When we spoke with you last, you had indicated that you are facing some pressure on asset quality. What is your current exposure to the stress sectors like infrastructure, power, etc?

A: Last time, when we met, I did mention that as a bank, as an organisation we have been able to contain the NPA menace. Q2 in fact we had brought down the gross as well as net NPAs both in absolute as well as in percentage terms. I did indicate that going forward there will be some stress.

Our bank's exposure to the power sector is about Rs 15,100 crore as of September. December numbers are yet to be audited and finalised. Within this, the utilities, we have an exposure of about Rs 5,000 crore.

Q: Have you had to restructure any of your assets?

A: There are one or two requests for restructuring which are under examination by the lenders to each of these utilities together.