Chennai: At a time when several nationalised banks are closing their unviable branches, State Bank of Mysore is opening new ones. After opening two new branches in recent times in Tamil Nadu, the bank now plans to open one each in Mumbai and Kolkata.
We will soon become a national bank with more focus on the southern part of India, says State Bank of Mysore chief general manager Niranjan Bardalai. Currently the bank has 606 branches.
With competition for corporate business being fierce, resulting in wafer-thin spreads for banks, State Bank of Mysore has decided to lend aggressively to the retail segment. Our strategy is to reduce our dependence on the corporate sector and increase our retail advances. We have been neglecting the trading community and this will be corrected, says Bardalai.
He says his bank will soon launch loan products for traders, educational loans for students and housing loans. At the end of the last fiscal the banks total advances portfolio stood at Rs 5,173.97 crore, while the total deposits were Rs 8,207.24 crore. Our cost of fund is 7.61 per cent and we get a spread of 3.13 per cent, he adds.
About the banks non-performing assets (NPA) Bardalai says the bad performance of coffee and coconut industries impacted the banks recoveries and consequently the NPA levels a bit. The gross NPA declined to 12.07 per cent from 12.83 per cent and the net NPA to 7.36 per cent from 7.65 per cent.
Like all other nationalised banks, State Bank of Mysore, too, had a bumper treasury revenue of Rs 72 crore last year. Trading profits will come from volatility in the securities market. Now we have a set of officials to monitor the market, he says.
The banks net profit in the last financial year shot up to Rs 65.89 crore from the Rs 25.72 crore registered during 2000-01. For the current fiscal the bank has fixed a profit target of Rs 130 crore.
About the chances of achieving the same, as lending rates are coming down and the possibility of earning bumper profits from treasury operations being remote, Bardalai says: Our advances are set to go up. Further, lending to the retail segment gives us higher spreads, which in turn will help to achieve the targeted profit.