Hemmed in by NPAs, poor demand, Exim Bank stares at muted year

Hit by increase in non-performing assets and subdued global demand, the national export finance institution Exim Bank is looking at a muted growth of 5-7 per cent for the current financial year.

The bank had witnessed a healthy balance sheet with 13 per cent growth in lending in the previous fiscal.

"Fiscal year 2017 is growing to be flat. This year, we are looking at a balance sheet growth between 5 and 7 per cent because global demand is low and we have also taken a hit with rising NPAs," Exim Bank Chairman and MD Yaduvendra Mathur told PTI.

Gross non-performing assets jumped to 9.3 per cent for September 2016 from 4.2 per cent in March.

Net NPAs during the first half of the current financial year rose to 2 per cent from 0.9 per cent a year ago.

"NPA percentage for us has increased like for others in the industry. It is coming from steel, metals and minerals, shipping and textile sectors," Mathur said.

Mathur added the bank is looking to sell off some of the bad loans.

He said globally, the current financial year has been difficult and domestic companies' overseas businesses are also going through a tough phase.

The bank's fresh disbursement during the year is likely to be in the range of Rs 40,000-45,000 crore, almost similar to Rs 40,000 crore in 2015-16, Mathur said.

He said 35 per cent of the balance sheet comprises loans to sovereigns while the remaining 65 per cent are to domestic companies' overseas and domestic operations.

The chairman said the bank wants to deliver large strategic projects overseas and not do too much of lending to corporates.

"Though we will continue to do that (lending to corporates), we would probably stop lending to infrastructure projects in the country," he said.

"For example, we were taking exposure to shipyards being built in the country for exports, as our mandate allows us to finance export-oriented infrastructure. But, those are big areas where we have found problems... some shipyards have defaulted," he explained.

Mathur said there is a task force which is being set up by the board to relook at areas on such fronts.