Canara Bank, Bangalore-based public sector lender has set a target to double its home loan portfolio to around Rs 17,500 crore by December 2010. as of December 2009, bank’s home loan portfolio stood at Rs 8,464 crore, little over 5 per cent of the total advances informed the bank’s executive director K L Jagadish Pai.
During the announcement of bank’s third quarter financial results he told Business Standard, “We had actually set a target to achieve at least 10 per cent of our loan portfolio from home loans by March-end 2010. But, it is not possible in the remaining two months and we intend to disburse another Rs 6,000 crore during the first three quarters of the next financial year-ending December 2010.” Meanwhile for the year-ending March 2010, the bank aims to achieve Rs 1,75,000 crore advances.
He told, however the bank has performed better in home loan sector and was able to achieve 27 per cent growth in the first three quarters of the present fiscal-ended December 2009 against the corresponding period last year. In August 2009 the bank had launched a home loan scheme in which it offered 8 per cent interest rate for the first year and 9 per cent for the second year and 10 per cent for the remaining period of the loan for individual home loan customers. The scheme has been extended up to March 2010.
Pai said, “The real estate sector is reviving and people are coming back for loans. We are the bank with lowest exposure to real estate among our peers. Our exposure to commercial real estate is less than Rs 2,600 crore presently compared to Rs 2,900 crore at the beginning of the fiscal. We are looking at financing more and more Bangalore-based real estate companies so that we will get more individual accounts during this year.”
In view of long gestational period bank is aiming to increase housing loans. He said the sanctions are likely to touch 10 per cent of the asset book of the bank, but the disbursal can be less. He added for the next two months of the present fiscal, the bank is likely to disburse another Rs 500 crore.
He told bank has opened more retail hubs whose number has increased to 37 across Tier-I, Tier-II and Tier-III cities in the country. He said, “We are targeting 10 accounts per day for each retail hub.” Thus the bank aims to target more of individual home loan seekers than the commercial real estate sector. The loan amount of these loans will be around Rs 15-20 lakh.
He added, the bank has not been aggressing in lending to commercial real estate segment in spite of big demand for funds, and said that at present the total exposure will stand around Rs 2,000 crore. He told, “We are not bullish on commercial real estate like many other banks.”
He said the present sanction of loans by the bank stand at close to Rs 30,000 crore, and added part of it will be disbursed over next 18 months.
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