The Hindu Business Line : Federal Bank upbeat on growth

Riding high on the recently concluded Rs 350-crore GDR issue, Federal Bank is confident of growing at least 25 per cent per annum in the next few years.

According to its Executive Director, Mr K.S. Harshan, "the bank has drawn up aggressive targets of expanding its network to 1,000 branches in the next three years from the existing level of 470 branches and strengthening customer base to over two crore from 40 lakh customers."

At present having advances of Rs 11,500 crore and over Rs 16,000 crore of deposits, the bank expects them to grow to Rs 16,000 crore and Rs 22,000 crore, respectively, in the next two years, he said, while inaugurating the bank's 470th branch here on Friday.

In spite of being the largest bank in Kerala and commanding leadership position, Federal Bank is not complacent. Realising the potential competition from other banks for NRI funds, it wants to aggressively market its products and reach out to more villages, Mr Harshan told Business Line.

"We are planning to expand our market share in the Indian banking industry to over one per cent from the existing level of 0.85 per cent. We are expecting our market capitalisation to go up to Rs 5,000 crore from Rs 2,000 crore," he said.

Stating that the bank has a comfortable current capital adequacy ratio of around 13 per cent with the recent GDR issue of Rs 350 crore, Mr Harshan said it can take care of the business growth in the next three to four years. On the plans of going in for tier-II capital, he said, "I am not capital hungry at present and I don't think it is wise enough to go in for tier-II issue in the current interest rate scenario. We are expecting the interest rates to come down soon and we may consider a subordinated debt issue then."

In a bid to significantly improve the non-fund based income levels, the bank is also considering to expand its product portfolio.

Already having alliances for selling life and non-life products and mutual funds, the bank is planning to aggressively cross sell the products of others to its strong customer base, he said.