Canara Bank doesn't plan to have additional exposure to airline companies: CEO

.Canara Bank doesn't plan to have additional exposure to airline companies: CEO

Public sector lender Canara Bank doesn't plan to have any additional exposure towards airline companies, K Satyanarayana Raju, the bank’s Managing Director and Chief Executive Officer, told Moneycontrol in an exclusive interview on January 29.

"We don't have any exposure to airline companies, except the Tata group, which is small. And we do not plan to have any additional exposure at the moment," said Raju.

He added that the bank had allocated Rs 1,000 crore to boost its technology over the next few years, of which it has already spent Rs 700 crore.

Edited excerpts from the interview follow:

What is Canara Bank's current exposure to airline companies? What are its plans about lending to the sector in future?

Except the Tata group, we don't have any exposure  to airlines companies. And we do not plan to have any additional exposure at the moment.

Canara Bank clocked good numbers in Q3FY23-24. How sustainable is your growth trajectory?

We’ve demonstrated  consistency and steady growth in the last few quarters. But the interest on deposits is rising. Under these circumstances, maintaining such numbers is a challenge for everybody. We are monitoring the situation very closely and are also very cost conscious, that's why we don't want to grow the topline at the cost of the bottomline.

So, we are maintaining an equilibrium between these two things, and we are sure that next quarter too we will see a credit growth of about 12% year-on-year (YoY).

What is your outlook on the credit-deposit ratio?

In Q3FY23-24 we have focussed more on credit because we have already achieved what we wanted with a CD (credit-deposit) ratio of 75 percent. Two years back, our CD ratio was 68 percent. We were losing a lot of interest income. That's why we have taken a call to grow credit more than deposits.

What is your outlook on your corporate loan book?

Regarding corporates, we have decided that the RAM sectors (retail, agriculture, and MSME) will comprise 40-60% of our corporate loans. I'm sure during the current quarter (Q4FY23-24), while my corporate loans will grow 10 percent, RAM will continue to grow at 14.5%. We are running several campaigns  this quarter to mobilise retail term deposits and CASA (current and savings accounts).

Also, we have launched a mobile app for corporates. Because our mobile app for retail is so successful, there was a huge demand for something similar from the corporate sector.

What is your spending on technology?

We have budgeted Rs 1,000 crore to be spent on technology over the next few years, of which we have already spent Rs 700 crore.

On January 1, 2024, we launched our state-of-the-art Centre of Excellence for D&A (data and analytics). It’s  the first of its kind among public sector banks,  as well as the industry. We are seeing the return on investment from investment in technology.

We are creating a virtual branch, a virtual customer service area. We are training our staff to interact virtually.

What about cybersecurity?

We have already appointed a Chief Risk Officer. From April 1, 2024, we will also have a separate cybersecurity department. So far, cybersecurity has been  part of  the risk department. The cybersecurity department will be headed by a Chief Security Officer (CSO), who will report directly to the whole-time director.