Shyam Srinivasan, MD & CEO at Federal Bank, in an interview, told CNBC-TV18 that the bank didn’t expect large corporate ticket sized loans to default.
The private sector lender reported earnings for the June-ended quarter on Friday, July 23, with higher slippages and lower loan growth given circumstances. Net interest income and profit came below expectations and provisions are also high.
“The non-corporate will grow well in the teens, the corporate may inch up a bit. So close to 10 percent growth is what we are looking at for the full year, but we will see how the second half shapes up,” said Srinivasan.
According to him, the bank has not seen large corporate ticket sized loans. “We have not had a large ticket corporate credit kind of challenge for a long-time and this time, in particular, we had some slippages in gold, we had some restructuring in gold; consciously we let them be because of no point when customers already under stress,” added Srinivasan.
On neo-banking, he said, “We are the only bank that had only 20 branches in 23 quarters and we have grown our business more than 25 percent each year, so our expansion and distribution is all digital and alternate channels. Therefore, the momentum that we are gathering in this space should help us more than double our customer base over a 3-year period.”
He further said that World Bank’s investment arm International Finance Corporation (IFC) will be investing in Federal Bank.
For the entire management interview, watch the video