25% AUM growth year-on-year is achievable, says Fedbank Financial MD
Anil Kothuri, MD & CEO, Fedbank Financial Services, says: “We intend opening 50 branches this year and most of which are done. And all the branches we open this year are focused on selling small mortgages. So, that branch count is slated to go from 130 to 180 okay. Now, every year we will continue to open branches and expand. Our norm is to open something like 50-60 branches every year. So, our branch count will increase by roughly 8% from here on every year for the foreseeable future. That will help us expand our presence in places where we are not there. We will enrich our presence in northern India and then foray eastwards.”
You have reached an AUM of around Rs 10,000 crore and the growth was also strong at 38% on a year-on-year basis. But going forward, do you think the base effect will come into picture or do you expect this pace of 35-40% AUM growth to continue in the coming years?
What we are guiding is that our AUM will grow by at least 25% year-on-year from here on.
So, that is the guidance that we are putting out. We have about 4,000 people spread across 600 branches in the country. A lot of these branches are yet to achieve scale.
So, once that happens, our dispersal will increase and our AUM will grow. So, 25% AUM growth year-on-year is achievable.
You are saying that some of the branches have not scaled up fully. If I have it right, you added 23 branches in the quarter gone by. Could you talk to me about what is your estimate of branch addition in the coming year and the coming few months? And also, what would it do to your operating costs?
We intend opening 50 branches this year and most of which are done.
