State Bank of Mysore may downsize debt raising plan

The Bangalore-headquartered public sector lender State Bank of Mysore (SBM) may downsize its fund raising plan through bonds this fiscal due to slow growth in advances.

Earlier, the State Bank subsidiary had planned to raise around Rs 500 crore through tier-II bonds this fiscal.

"We will take a view about the size of the issue in the fourth quarter. As there is slow growth in credit in the first half, it may not be Rs 500 crore as planned initially," SBM managing director Dilip Mavinkurve told PTI over phone today.

He, however, said the bank has been witnessing pick up in credit growth in the first two months of the second half. By the end of September, gross advances rose 15% to Rs 35,941 crore against the same period last year.

"In the ongoing quarter, agricultural advances are showing some momentum. Also, a lot of sanctioned loans are likely to be disbursed. So, we are hopeful of closing this year with a 16-18% credit growth," Mavinkurve said.

Referring to non-performing asset (NPA), he said the bank has seen stress in sectors like steel, textiles and power along with small retail loans. In the second quarter, gross NPAs rose to 3.72% from 3.12% an year earlier while net NPAs were 1.82% against 1.48% in the same period last year. The bank posted a net profit of Rs 77.78 crore, down by 17% for the second quarter of this fiscal compared with Rs 93.36 crore in the corresponding quarter of last year.