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Federal Bank plans to hike mid-teen growth in credit for FY22

As per reports, Private sector lender Federal Bank will witness a hike in credit growth into “mid-teen” figures.

Majority of the loan segments will increase over 20 percent levels and a few like corporate will rise around 10 percent.

The aim is to achieve the credit growth target next fiscal according to analysts.

Market experts record a marginal growth in share of gold loans in the overall book.

Meanwhile, studies reveal a portfolio growth at 20-30 percent levels compared to the current 60 percent levels.

Moreover, the bank has an estimated provision of over Rs 1,200 crore to enhance its provision coverage ratio.

This is also to ensure that it meets it’s targets on return on assets towards the end of 2021-22. Non-performing assets do not pressurize the borrower through poor credit scores.

In fact, they further restrict the bank from enforcing all the recovery efforts till the asset is a notional NPA.

The bank plans to launch its credit card offering in the next month to complete its product suite.

It will offer the card to existing customers starting in April and will go to new bank customers thereafter.

However, the bank needs clarity on rules for its non-bank lending subsidiary Fedfina.

This is required to decide whether to take the company public or allow private equity partner to increase its stake.

Further, the capital of the non-banking financial company is in abundance to sustain the current year.


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