During the first quarter, the bank anticipated an overall treasury income of Rs 300 crore, but actually earned Rs 500 crore, much better than expected, Indian Bank MD and CEO Binod Kumar told PTI in an interaction.
Overall, he said, “We anticipate treasury income between Rs 1,000 crore and Rs 1,500 crore during the current financial year”.
Treasury income comes from two components. The first is trading income, and the other is the interest income from investments.
Asked about asset quality management, Kumar said the bank has been managing it quite well.
The bank aims to bring down gross non-performing assets (NPAs) to 1.5-1.6 per cent of the total advances and Net NPAs to 0.15-0.2 per cent by the end of the current financial year.
Besides, he said, the bank would undertake the sale of Rs 200 crore in bad loans to an (ARC) during the current financial year.
On the asset side, Kumar said the lender expects its gold loan book to cross Rs 1.5 lakh crore in the current financial year, supported by robust demand.
“Gold loan is safe lending for banks…it is not a consumption loan, but mostly it is income-generating and also helps small businesses to grow.
“Last year, we saw very significant growth of 30 per cent in the segment due to a jump in gold prices. It will be slower this year as there is a 30 per cent decline in gold prices,” Kumar said.
This growth would come from tonnage, he said, adding that the gold loan segment is likely to grow about 20 per cent.
Currently, the gold loan portfolio is around Rs 1.25 lakh crore, and the book should exceed Rs 1.5 lakh crore during this financial year at the anticipated growth rate, he said.
Kumar further said that RAM (Retail, Agriculture, and MSME) constitutes 65 per cent of the overall loan book while the remaining 35 per cent is from corporate.
The bank wants to maintain the ratio going forward, he said, adding that RAM has huge capacity for growth with a lot of opportunity in agriculture and MSMEs.
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