Canara Bank has a corporate loan pipeline totaling Rs 47,000 crore amid rising demand from Indian companies. Managing director Brajesh Kumar Singh said, "We have a sanctioned corporate loans pool of Rs 30000 crore and proposals worth Rs 17000 crore." The bank expects credit growth to stay above 19% this quarter.

Synopsis

Canara Bank has a corporate loan pipeline totaling Rs 47,000 crore amid rising demand from Indian companies. The bank expects credit growth to remain above 19% year-on-year for the upcoming quarter. It reported significant growth in deposits and loans due to a strategy focused on non-resident Indian customers. Management anticipates maintaining a return on assets above 1% despite future provisioning requirements.

Kolkata: Canara Bank said it has a robust corporate loan pipeline around Rs 47,000 crore, reflecting steady credit demand from India Inc amid rising bond yields, which made market borrowing costlier.

This, along with the festive demand from individuals, would keep the bank's advance growth above 19% year-on-year for the third quarter, managing director Brajesh Kumar Singh told ET.

"We have a sanctioned corporate loans pool of Rs 30000 crore and proposals worth Rs 17000 crore which are being reviewed," Singh said.

India's bond yield hardened 44 basis points in the second quarter prompting companies to seek bank funding more instead of market-linked resources mobilisation.

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The state-owned lender reported a 19.5% year-on-year credit growth for the second quarter to Rs 13.75 lakh crore. This was helped by a $3.2 billion (about Rs 34000 crore) lent to overseas Indians in an FCNR-B leverage strategy that allowed non-resident to borrow from banks operating in India and park a larger amount in foreign currency non-resident-bank (FCNR-B) accounts.

The bank mobilised $5.8 billion of FCNR-B deposits using the Reserve Bank of India's dedicated window aimed to boost dollar inflows and the country's foreign exchange reserves.

This helped Canara to report 13% deposit growth while the credit-deposit growth gap widened to 640 basis points from 250 basis points seen three months back.

"We are taking efforts to grow deposits in excess of 13% to narrow the gap," Singh said.

Singh meanwhile said that the bank expects to keep return on assets (RoA) above 1% despite a projected Rs 12000-15000 crore provisioning under the expected credit loss framework, which will come into effect from next fiscal. The RoA will be backed by higher net interest income and net profits, he said.

Investors had expressed concerns over a possible dip in RoA below 1% following his remark on ECL liability during the bank's post-earnings call Wednesday.

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