Canara Bank eyes 8-10% loan growth; rise in corporate credit in FY23
Aims to increase balance sheet size to more than Rs 20 trn as compared to Rs 18.27 trn at present
Canara Bank raises benchmark MCLR, loans to be costlier
Mumbai: State-owned Canara Bank is expecting an 8-10 per cent growth in advances as well as a healthy double-digit rise in corporate loan portfolio in the current financial year, its Managing Director and CEO L V Prabhakar said on Monday.
In the fiscal ended on March 31, 2022, the lender's gross advances grew by 9.77 per cent. "Last year (FY22), we had targeted a loan growth of 7.5 per cent and closed the year at 9.77 per cent. For FY23, we have given guidance of a minimum growth of 8 per cent. However, going with the present trend, we expect that we will grow at 10 per cent," Prabhakar told PTI in an interaction. "Overall we are targeting that by March 2023 our balance sheet size will be more than Rs 20 lakh crore as compared to Rs 18.27 lakh crore today," he said. The bank's Retail, Agriculture and MSME (RAM) segment, which constitute 57 per cent of its total loan book, rose by 10.94 per cent in the previous fiscal. Within, retail grew by 9.51 per cent, agriculture by 12.75 per cent and MSME by 9.87 per cent.
Corporate loan book, which witnessed a growth of 8.27 per cent in FY22, is expected to grow at 10 per cent. The bank is seeing a good traction in corporate loan portfolio and has a pipeline of Rs 65,000-70,000 crore. "We are getting a lot of inquiries as far as infrastructure, renewable energy and manufacturing sectors are concerned. At least we are having about Rs 65,000-70,000 crore of corporate loan proposals with us for appraisal. "Already, we have underwritten Hybrid Annuity Mode (HAM) projects worth Rs 35,000 crore, which will be disbursed in the current year," he said.
On capital raising plan, Prabhakar said with reduction in risk-weighted assets to 72 per cent from 78 per cent earlier and higher Capital to Risk-weighted Assets Ratio (CRAR) at 14.90 per cent, the requirement for capital has also reduced. "As of now, we don't require any capital but to be future ready, we will be raising at an appropriate time taking into consideration the yields," he said, adding that the bank will look to raise Rs 9,000 crore through issuance of additional tier I and tier II bonds in the latter part of the fiscal.
