No rise in defaults despite rate hikes: CorpBank

Corporation Bank has not seen any rise in loan delinquencies despite rising interest rates,an official said.

Written by Agencies | Mumbai | Published:October 10, 2011 11:14 am

Mangalore-headquartered public sector lender Corporation Bank has not seen any rise in loan delinquencies despite rising interest rates,a top bank official has said.

“We don’t see any rise in defaults in the recent times despite repeated policy rate hikes by the central bank,” the official said over the phone from Mangalore,on condition of anonymity.

The official further said the bank has formed monitoring cells in various regions to inspect vulnerable segments of its loan portfolio.

In the first quarter this fiscal,the lender reported a gross non-performing assets (NPA) ratio of 1.07 per cent,down from 1.11 per cent in the corresponding period last year.

However,its net NPA ratio increased marginally to 0.52 per cent during the April-June period from 0.43 per cent in the previous year.

Earlier,the bank said it aimed to bring down its net NPA ratio to zero by the end of this financial year.

With respect to various segments of its loan portfolio perceived as high risk,the official said big-ticket loans in the infrastructure sector would not be impacted,as it hopes that the rise in installment payments would be absorbed by the companies.

However,loans to mid-size corporates,along with retail advances,may see some repayment pressure,the official admitted.

This is significant,as most bankers say various delays in infra projects are a cause of concern for them and fear delinquencies,especially in the power sector,which has been hit by coal shortages and delays in the grant of environmental clearances.

About 10 per cent of the bank’s loan book comprises infra funding,mainly in power and road projects. The size of Corporation Bank’s loan book stood at Rs 79,000 crore as of the June quarter and it has witnessed a growth rate of above 20 per cent in recent times.

For all the latest News Archive News, download Indian Express App

  1. No Comments.