Private sector lender IDFC First Bank is targeting loan disbursements of between 18% and 20% in the new fiscal year 2022-23.
“In the new fiscal year 2022-23, disbursements at the bank level will increase between 18% and 20%. On the retail portfolio, we expect 25% year-on-year growth,” said V Vaidyanathan, Managing Director and CEO of IDFC First Bank, adding that the lender has sufficient capital for its growth.
The bank had reported an 11% year-on-year growth in gross funded assets to ₹1.22 crore as of December 31, 2021.
“We are starting to say openly that all the past issues on the lending side are behind us and now we are going to look to the future,” he said during an interaction with Activity area.
When asked if the focus is on retail, Vaidyanathan said other segments such as wholesale banking, CMS, transaction banking and commerce will also start to grow now.
Tier 2 capital
The bank had announced on February 8 that it had raised ₹1,500 crore through a private placement of Tier 2 bonds, which it said would help boost the overall growth outlook.
Vaidyanathan noted that the bank raised Tier 2 capital for the first time.
“We have more headroom to raise Tier 2 capital and further improve capital adequacy and give us room for growth,” he said.
Taking into account the capital increase, the bank’s capital adequacy ratio reaches 16.5%.
Inherited Stressed Assets
The lender also does not expect major problems related to the stressed assets inherited from the past.
“We can set aside concerns about asset quality and move forward with growth. We only have legacy liabilities at 8.7% or around ₹27,000 crore but this is an opportunity as we will replace them at lower rates,” he added.
For the quarter ended December 31, 2021, the bank reported a 117% increase in its standalone net profit to ₹281.06 crore from ₹129.51 crore a year ago. Gross non-performing assets increased to 3.96% of gross advances at year-end, from 1.33% as of December 31, 2020.
February 09, 2022