MUMBAI IDBI Bank aims to double lending and deposits and slash back its stock of non-performing loans, it said on Tuesday in announcing a new three-year strategic business plan.
IDBI, in which the government is considering selling down its stake to below 50 percent, has received expressions of interest from foreign investors including multi-lateral agencies for a planned share sale, Chief Executive Kishor Kharat said, although the bank would wait for better valuations to sell shares.
Two dozen state-run lenders including IDBI control more than two thirds of India's banking assets. Slower economic growth and a history of political interference, weak management and the lack of a bankruptcy code have however created a mass of troubled or stressed debts.
The Reserve Bank of India (RBI) has called for a clean-up of bank balance sheets by March next year, while the government is implementing broader reforms including stricter governance and lowering of its stakes in state banks to make them competitive.
Kharat, who was appointed last August, said IDBI aimed to double its loans plus deposits to 10 trillion rupees ($147 billion) by March 2019, and will focus on increasing its lending to individuals and the agricultural sector to cut dependence on its infrastructure financing business.
It aims to reduce its gross non-performing assets (NPAs) ratio to less than 3 percent by the financial year ending March 2019, from 8.94 percent as of December, Kharat said, unveiling the three-year business plan.
Originally called the Industrial Development Bank of India and becoming a commercial bank 12 years ago after operating for four decades as an infrastructure financier, IDBI has now set a goal of being a "near zero net NPA" lender by March 2019.
"We are now at a point of inflection from where we can grow our business, from where we can catch up our growth alongside the industry," Kharat told a news conference.
He said the business plan had nothing to do with an announcement in the government's budget on Monday that it would consider reducing its stake in IDBI Bank to below 50 percent.
The bank plans to raise 200 billion rupees in equity capital over three years, and is also betting on the sale of non-core assets such as a stake in India's biggest stock exchange to fund growth, Kharat said.
It plans to add 2000 new banking points, including 500 new branches, and will add about 6,000 people to its current workforce of 15,500, he said.
($1 = 67.9600 rupees)
(Reporting by Devidutta Tripathy; Writing by Himank Sharma; Editing by Greg Mahlich)
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