Expect 25% growth in the current fiscal: Dena Bank

In an interview with CNBC-TV18, DL Raval, Chairman of Dena Bank spoke about the latest happenings in his company and the road ahead.

Below is a verbatim transcript of the interview with CNBC's Latha Venkatesh and Anuj Singhal. Also watch the accompanying video. Q: How has the credit and deposit growth been in the year? Do you see any growth prospects? How is the year expected to end? A: We have been able to achieve a business mark of above Rs 1 lakh crore. There will be a total addition of almost Rs 15,000 crore of business during the nine month with a required growth of 26% and credit growth of 34%, year on year basis. The growth has occurred in areas like infrastructure, retail, petroleum, iron and steel, and cement apart from agriculture. In the remaining three months, growth will continue to occur in retail and infrastructure. The sanctions have piled up with all the banks sanctioning for huge infrastructure. Financial closures are taking place and documentations are in progress in a number of accounts. Q: Will you be able to end the year with your expected numbers? A: Yes. We are looking for a growth of almost 25% that we have revised. Initially we had projected 22% which will now be around 25% to 26% growth by the end of the year. Q: For most banks the year on year growth is no so good. So, what is your year to date growth? A: We have a 34% growth and we are trying to focus on infrastructure and good sanctions. We try to penetrate in the industries related to infrastructure like iron and steel, and cement. We were very aggressive this time with retail. We had a growth of 25% on a year on year basis as retail was very low in Dena Bank last year. Similarly, in agriculture and areas which are related to agriculture, we have conducted many workshops at various places. We have gone to the cluster to make presentation for the SME clients. We as well as several clients have explained them about Dena Bank schemes and asked them to prefer Dena Bank whenever they plan to expand. Q: In FY10 your net interest margins were subdued at 2.1%. Do you have any target in mind for the full year as far as net interest margins are concerned? What will be the trend in FY11 so far? A: We might maintain the net interest margin of around 3.1 to 3.2% by the end of December and we expect to maintain that by end of March. Q: What do you have to say about capital of about 600 crore that you were promised by the government? A: The cabinet has approved the capital infusion of a few banks, out of which 520 crore are approved for Dena Bank, for the current year. We have not received any official communication from the government for the same but we expect to get the capital before March. Q: Are you looking at either hybrid tier one or tier two for capital raising? Besides, how much do you expect to expand your capital? A: Our capital adequacy is already above 12% and for tier one above 8%, so we do not need any capital raising right now. If we face any delay in getting capital from the government, then we expect a capital raising of 150 crore for tier two capital. We will go to the market in the end of February, only if we do not get the capital or any indication from the government by 15th February. Q: What is your total exposure to MFIs as they are a bit of a concern for your stocks? A: Our exposure to MFIs is very low of around 95 crore which is spread to eight-nine MFIs. All our instalments and payments are regular, so Dena Bank has no issues on any of the MFIs. Q: Are you planning to reschedule any of the loans? A: Nothing can be said as nobody has approached till date.