Thursday November 5, 07:00 PM

Corporation Bank sees 22 pct loan growth in FY10

MUMBAI (Reuters) - State-run Corporation Bank sees loans growing 22 percent and net interest margin marginally up at 2.4-2.5 percent at the end of 2009/10, its top official said on Thursday.

"So far credit growth is seen in infrastructure, sugar, steel and cement sectors. A number of loan proposals are coming from steel, roads, ports and pharmaceuticals sector, with power sector showing maximum loan demand," J.M. Garg, chairman and managing director, said at an analyst meet.

Infrastructure sector currently makes up 12 percent of the bank's loan portfolio, while retail comprises 18 percent.

Repricing of deposits and increasing focus of the bank to push for higher share of low-interest bearing current and savings account to 30 percent in FY10, from 23 percent now, would help margins rise from 2.3 percent levels, Garg said.

The bank is also expecting non-interest income from core business to be at 6.5 billion rupees in FY10, up from 4.3 billion rupees a year ago with introduction of new business areas like supply chain management, loan syndication and increasing focus on government tax collection, he added.

(Reporting by Tamajit Pain; Editing by Sunil Nair)

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