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Vijaya Bank to raise Rs 750 cr

Last Updated 28 October 2016, 08:45 IST
Vijaya Bank is planning to raise Rs 750 crore through Tier-I bonds in the current financial year to meet business requirements, its MD and CEO, Kishore Kumar Sansi, said.

“The Government of India doesn’t have unlimited funds to give capital to all the banks. We are an extended arm of the government. Last year, we received Rs 224 crore based on the efficiency parameters. However, we have our own plans to raise Rs 750 crore through Tier-I bonds,” Sansi said.

The banks capital to risk weighted assets ratio is at 12.58% (Basel III) with common equity tier (CET I) ratio at 8.27%, and asset turnover ratio (ATR I) ratio at 1.13%.

Focus on recovery

Sansi said, “Our strategy by the recovery department yielded good results to contain our NPAs. During this quarter, our total cash recovery is about Rs 261 crore, and we are able to upgrade it to Rs 435 crore, which means total net contribution is Rs 696 crore. Net slippages, we are negative by Rs 98 crore.”

Sansi further added, “We are rigorously following up with past NPAs. We have created a war movement with Vijaya Bank adalat camp. We are trying to persuade customers to repay. These accounts are small-size tickets. For the last four quarters, sectors like steel, power and textiles among others have witnessing stress. Vijaya Bank’s exposure towards the steel sector is Rs 3,200 crore.”

Sansi is hopeful as the Centre is taking concrete steps, and is optimistic that in the coming quarters, the situation will be better.

“We are shedding our exposure to corporate sector. We are not taking any further exposure to the corporate further, unless, it is extremely good rated. Further, whatever the repayments are happening, we are not refinancing. We are expecting 10-15% of our corporate exposure reducing in next six months. It has been happening from the last three quarters,” Sansi said.

When asked about the expectations for the year, Sansi said, “The situation is very uncertain. Though we wish to reduce our NPAs, the situation is dynamic. Let me also assure that there is back log of large loans looming at our head.”

On adding more branches, Sansi said, “This year we have already opened 100 branches, and we will add 50 more branches.”

“Most of the growth is coming from Tier-II/III/IV towns. We will continue to expand our branch network. However, not aggressively as we have done in last few years. Looking at the fact that most of the transactions is also getting routed through alternative channels... so the footfalls are reducing. Hence, we are taking conscious and informed decision of what kind of growth we need to do.”

On an average 4-5% employees are getting retired right from security to the top level. Total staff strength as on September 30 stood at 15,717. This year, the bank has recruited 1,840 staff.

On employee cost, Sansi said, “Employee cost have gone up because of pro-active steps taken by Vijaya Bank management to provide extra for the pension funds. For pension provision, we have earmarked Rs 60 crore during this quarter.
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(Published 27 October 2016, 17:37 IST)

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