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Canara to cut NPAs

R.K. Dubey in Calcutta on Thursday. A Telegraph picture

Calcutta, Aug. 21: Public sector lender Canara Bank plans to sell Rs 900 crore of bad loans to asset restructuring companies in the current quarter.

The bank had sold Rs 600 crore in the first quarter and another Rs 1,300 crore in the fourth quarter last year.

“We are planning around a Rs 900-crore asset sale in the second quarter,” R.K. Dubey, chairman and managing director of Canara Bank, said on the sidelines of a Ficci banking conclave today.

Dubey said the bank was aiming to lower its gross NPA (non-performing assets) as a per cent of total assets to 2 per cent by the end of 2014-15.

Gross NPA by the quarter ended June was 2.67 per cent, marginally higher than the previous quarter on account of a Rs 400-crore agriculture loan waiver in Telengana.

Canara, like other PSU banks, is stressing on loan recovery and hopes to lower its NPA and provisions to boost the bottomline.

“We are planning to achieve a 2 per cent gross NPA and net NPA below 1.5 per cent by March. This would be achieved by improved cash recovery and reduction in slippage and also through credit growth,” Dubey said.

He said the bank has sought Rs 500 crore from the government and was awaiting approval for raising Rs 3,000 crore from institutional investors.

“We are ready with the QIP plan. We have got the RBI approval. We are yet to get approval from the ministry, which is likely to come any day,” Dubey said. “If the government gives the nod now, we will raise the funds by September.”

The bank may also raise equity next fiscal through a follow-on public offer.

 
 
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