As far as capital adequacy is concerned, the bank is well capitalized at 15.68 per cent and it can easily handle the business growth this year, he told PTI.
However, he added, “There is a need to create some buffer on the equity side. So, we will plan to raise capital of Rs 250 crore or Rs 300 crore either through equity or bonds.”
“We will look at our Q3 performance and credit demand momentum and take a decision on QIP or other avenues based on that.”
The bank has redeemed Additional Tier 1 (AT1) bonds, he said, adding that now the bank will try other means, including QIP, which is cost-effective.
The Government of India’s stake in the bank stood at 98.25 per cent at the end of September 2022. If the bank raises capital through share sale, the government’s stake will come down depending on the quantum.
During the last two years (2020-21 and 2021-22), the government infused Rs 5,500 crore and Rs 4,600 crore through non-interest bearing recap bonds.
With an investment of Rs 4,600 crore, the government’s stake in the bank has increased to 98.25 per cent by March 31, 2022.
On loan growth, Saha said, the bank is targeting 15 per cent growth during FY23 and the current capital base can easily support the same.
The Delhi-based lender had shifted its focus to the retail, agriculture and MSME (RAM) segment to de-risk its balance sheet. Corporate segment lending grew marginally by 2.5 per cent in Q2 FY2023, while retail lending improved by 16 per cent year-on-year.
Last week, the youngest public sector bank 27% growth in profit to Rs 278 crore in Q2 FY23 due to reduction in bad loans. The bank had made a profit of Rs 218 crore in the same period a year ago.
The bank’s total income during the July-September quarter of FY23 increased to Rs 2,120.17 crore as against Rs 1,974.78 crore in the corresponding period of FY22.
The bank’s gross non-performing assets (NPAs) came down to 9.67 per cent at the end of September 2022 from 14.54 per cent during the same period a year ago. Net NPA also came down to 2.24 per cent from 3.81 per cent in the second quarter of last year.
As a result, the bank’s provisioning for bad loans and contingencies declined to Rs 125 crore for the quarter as against Rs 203 crore a year ago.