Expect 14-15% loan growth in FY20, 16-17% for FY21, says Federal Bank’s Shyam Srinivasan

When asked about their non-corporate book and if there were any signs of stress in SME, retail, he said, “For long I have maintained that we shouldn’t over compare banks because the structures are very different. Ours is a significantly secured portfolio. I don’t have much of an unsecured book. Banks that were celebrating unsecured success over many quarters had the gains and now have to face some of the pain.

"Therefore, between now and next 3-4 quarters, we do not see any large formation of stress on the secured side unless  property prices all crash and then that becomes a different problem. I am hopeful that that doesn’t show up. There could be some wrinkles but nothing of the scale that would worry us,” Srinivasan added.

On loan growth front, he said, “At this juncture retail is looking north of 24-25 percent. The large tickets are okay but I don’t it growing in high teens, so the blended number for us this as we exit FY20 is between 14 and 15 percent. The next year will be in similar, 16-17 percent dominated by retail and granular small kind of business. Corporates will be chunky and episodic. I don’t see any big opportunity other than takeover.”

They expect gold loan book growth to continue to be north of 25 percent, he said, adding that they are also gaining share in auto loan segment, particularly in Mumbai, Kerala and Tamil Nadu. However, agriculture is seeing pain across banks due to waivers announced by various states, he said.

“Growth is bound to come, if not in this quarter a couple of quarters down. It cannot keep the system in pause mode. So I would, between now and next 2 quarters - a continued watch, focus on secured, trade for price for volume selectively and focus exclusively on getting our credit cost down,” he said.