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Canara Bank, which registered a tardy credit growth in the December quarter, expects its credit offtake to pick up next fiscal, seeing signs of recovery in the market. The bank's loan growth slipped to 16 per cent from 24 per cent in the September quarter. However, the bank saw a 20 per cent growth in deposits during the third quarter.
Mr S. Raman, the bank's Chairman and Managing Director, said the bank expected to end the next fiscal with an 18-19 per cent growth in credit and shore up the net interest margin by 20-30 basis points to about 2.9 per cent from 2.7 to 2.8 per cent in the current fiscal.
“We prefer to be cautious in our credit growth and avoid an aggressive path in lending so as to maintain our asset quality,” he told media persons here on Tuesday.
He admitted that capital expenditure in the system was subdued so far this fiscal, but hoped optimism will return in the next fiscal.
“The sentiment has improved, as reflected in the stock market. Hopefully, the improved sentiment will result in better capital expenditure next year,” he said.
The bank expects a growth of 18-19 per cent in lending and 17-18 per cent in deposits.
“We have grown more aggressively in deposits during this fiscal and our credit-deposit ratio has come down now to about 69 per cent.
“We would like our advances to go a bit faster next fiscal than the growth in deposits,” Mr Raman said.
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