The public sector bank’s stock closed 2 per cent lower at rs 25 per share on BSE
had placed the lender under PCA framework in December 2017 in view of high non-performing assets (NPAs) and requirement to raise capital. The PCA framework had placed curbs on the bank giving out big-ticket loans and had expected the bank to engage in effective cost controls.
Gross NPAs of the bank have declined to 15.35 per cent in March 2019 from 17.35 per cent in March 2018. With large provisions made during the year, its net NPA came down to 5.71 per cent in March 2019 from 11.74 per cent a year ago.
The bank’s provision coverage ratio jumped to 83.30 per cent in March 2019 from 63.65 per cent a year ago, on account of higher provisioning in the quarter.
“There is no backdating of bad loans (NPAs). We have ensured that, henceforth, we should consistently have net NPAs of below 6 per cent. We have identified accounts on our own also,” Bharati said.
The lender's credit costs, or the amount provided for bad loans as a percentage of loans, spiralled to 8.89 per cent in FY19 against 8.68 per cent in FY18.
"The credit cost will be coming down. For the past two years, the bank has focused on improving the quality of assets. Going forward, we are going to take very cautious approach on quality of assets that we contract,” she said.
The credit cost for FY20 is estimated at 2-2.5 per cent, close to the level of 2.65 per cent seen in FY17, another Corporation Bank
Referring to pace of lending in FY20, she said the bank has taken a conservative growth estimate of 7-9 per cent for this year.
The loans portfolio grew from Rs 1.19 trillion in March 2018 to Rs 1.21 trillion in March 2019. The bank is spreading across all sectors – especially retail, agriculture and MSME, mid corporate and large corporates. The bank has portfolio of Rs 20,000 crore under each bucket.