Jana Small Finance Bank targeting deposit growth of 20% in FY25, says CEO

Ajay Kanwal- MD&CEO- Jana Small Finance Bank

After reporting a robust profit in the last reporting quarter of 2023-24, Jana Small Finance Bank (SFB) is targeting a deposit growth of 20 percent in FY25, said Ajay Kanwal, chief executive officer and managing director. “We recorded higher deposit growth compared to credit growth in FY24. And in FY25 we are targeting a deposit growth of 20 percent,” Kanwal said in an exclusive interaction with Moneycontrol.

Kanwal also said that the bank is looking to have 65 percent of its total portfolio under secured lending from the 60 percent recorded at the end of FY24.

Touching upon branch expansion strategy during the interview, Kanwal said that the bank may consider opening 60-70 new branches this fiscal. Edited excerpts.

What is your assessment of the Q4 numbers?

We had a strong asset momentum with declining asset quality. Our cost of funds went up by around 80 basis points in Q4FY24 but our net interest margin (NIM) worked well and increased 20 basis points. This was due to our affordable housing and micro loan against property working well.

The bank’s deposit growth outpaced credit growth but our CASA (current account and savings account) was flattish.

What is your strategy on branch expansion?

In FY24 we relocated some of the new branches we opened. Jana SFB has its presence in 181 cities and 24 states. Our total number of branches stood at 807.

In the coming year, we may look at growing our network by another 60-70 branches.

How do you as an SFB look at credit cards as a segment?

Credit cards as a segment is exciting and we may look at launching an MSME (micro, small and medium enterprises) credit card, but not anytime soon.

What is the total secured and unsecured segment of your portfolio?

We have reached a total of 60 percent secured portfolio in the six years of our existence. Our aim is to reach 65 percent by the end of FY25 and it is working well for us.

Lastly, what is your outlook for FY25?

We reported a net profit of Rs 321 crore for the January-March quarter of the financial year 2023-24, jumping 301 percent from Rs 80 crore last year. Net interest income grew to Rs 2,127 crore in FY24 versus Rs 1,660 crore in FY23, up by 28.1 percent.

The GNPA (gross non-performing assets) ratio improved to 2 percent against 3.6 percent and net NPA improved to 0.5 percent against 2.4 percent. The NIM improved to 8 percent in FY24 against 7.8 percent in FY23.

For FY24, PAT (profit after tax) stood at Rs 670 crore compared to Rs 256 crore in FY23, a growth of 162 percent. Total loans stood at Rs 24,746 crore, growing by 24.9 percent YoY and deposits stood at Rs 22,571 crore, growing by 38 percent.

Going ahead, we may look at growing our deposits by 20 percent.