MONEY MATTERS

Calcutta, July 22: The Centurion Bank of Punjab has decided to go slow on two-wheeler financing and push up housing and personal loans.

“The bank has been a strong player in the two-wheeler loan segment,” said Yateesh Gupta, marketing director of the Centurion Bank of Punjab. Two-wheeler loans comprise 37 to 38 per cent of the bank’s retail loan portfolio. “We want to bring this down to 20 per cent in a year or two,” Gupta said.

The bank is also looking at the opportunities in the education loan segment.

The stagnation in the agriculture sector and rise in interest rates have affected credit offtake in the two-wheeler segment. HSBC has exited the auto loan business while GE Money has stopped financing two-wheelers.

“Though we don’t want to reduce our two-wheeler loan portfolio in absolute terms, we will trim its percentage share in our total retail business,” Gupta said. Instead of encouraging the financing of two-wheelers, the Centurion Bank of Punjab will concentrate on increasing its home and personal loan portfolio.

The bank plans to increase the share of mortgage lending to 24 per cent and personal loans to 27 per cent in the next one year.

The bank has also revised upwards its provisioning against delinquencies in two-wheeler, car and personal loans in 2006-07. It has made a specific provisioning of Rs 19.41 crore and wrote off Rs 20.83 crore. The bank’s net non-performing assets rose to 1.26 per cent of net advances on March 31 against 1.13 per cent in the corresponding period a year ago. This was because the bank recorded bad debts worth Rs 165.16 crore during 2006-07.

The bank’s retail loan portfolio was Rs 11,240.80 crore on March 31.