Andhra Bank will focus on lending to agricultural and micro-, mini- and small enterprises, according to its Chairman and Managing Director B.A. Prabhakar.
“These two sectors are our priority business areas, as there is huge potential for growth. The non-performing assets here are also under control,” Prabhakar said.
The agriculture portfolio of Andhra Bank grew 26 per cent year-on-year, small and medium enterprises 18 per cent and retail 13 per cent till date.
Though demand for retail loans had picked up, competition has stiffened as major banks lowered interest rates.
“However, we have been trying to encourage retail lending. A lot depends on quality and service in which we have an advantage,” he added. In the corporate segment, credit offtake has been muted except for working-capital needs. “This trend is expected to continue for next six months at least,” the Andhra Bank chief said. Asset-quality issues would continue to be a challenge for banks, as slippages till last quarter were high. The current stress on assets quality is not confined to a particular sector, though is a tad higher in construction and power businesses, and the mid-corporate sector, he said.
On the restructuring of corporate loans, he said the number of requests had come down in the present quarter, as those who wanted it had already completed the process.
GROWTH
Given the business environment, deposit and credit growth could be in the range of 14-16 per cent and 15-16 per cent respectively. The net interest margin for Andhra Bank could be around 3.1 per cent against 3.15 per cent in the second quarter, he added.
The bank will recruit 2,000 officers and 1,500 clerks soon, Prabhakar said.