Canara Bank confident of managing NIM at around 3%, expects 12-14% credit growth: MD

economictimes.indiatimes.com:

K Satyanarayana Raju, MD & CEO, Canara Bank, says “for the entire financial year, the bank has given a guidance of 3.05 NIM. Last year, cumulative NIM was 2.92. The current quarter, we were able to show a NIM of 3.05.

Though undoubtedly, there is stress on interest expenses because of a higher rate of interest, since 52% of our portfolio is MCR-linked, it is giving good interest yields on advances. Even if the repo rate comes down gradually, that will impact only 34% of our advances and that is the reason we do not see any fall in NIM below 3%. We are confident that we can manage at around 3%.”Your cost of funds have risen quite a bit in this quarter. What is your own estimate, where will the cost of funds peak?The cost of funds has been increasing from last October onwards.

We started paying the higher rate of interest from October 6, Currently, we have reached peak interest expenses. But the only thing is that in the current quarter also, a high interest rate regime is continuing and so in the current quarter, whatever resources we mobilise in the form of term deposits may attract the same rate of interest. That is the reason we want to take benefit out of whatever cushion we have in the form of a lower CD ratio and we want to feel that we want to go beyond the 75%.