Bank of India rides ahead on retail loans
Bank of India is now concentrating on home loans, while its vehicle loans portfolio is growing too:
Bank of India has turned around and posted yoy net profit of `88 crore in Q1 2017-18 against a net loss of `741 crore a year ago. Though its gross advances grew by just 0.90% yoy, its retail loans increased by 13% yoy standing at `42,802 crore as on 30 June 2017. The share of retail loans in total domestic advances has increased from 13.80% in June 2016 to 15.20% in June 2017, though this portfolio lagged the share of corporate and other loans (50.13%), MSME (17.86%) and agriculture (16.81%) in Q1, 2017-18. Priority sector advances (41.20%) and agriculture advances (19.77%) too were above the regulatory stipulation. Gross advances, at `391,062 crore, grew by 0.90% yoy.
Dinabandhu Mohapatra, MD & CEO at the bank, says within the retail portfolio, vehicle loans showed the maximum (27.22%, `3655 crore outstanding) yoy growth, followed by loans against property (19.93%) and home loans (15.28%). He said the bank has developed a Lead Management System (LMS) wherein any prospective customer can apply for retail loans and the system is is being monitored on a day to day basis at various levels.
GENDER WISE BORROWERS
The total number of retail accounts in the bank reached 753,006 as of Q1 2017-18. The sum total of priority and non-priority sector retail loans have been increasing consistently - from `17,782 crore in 201213 to `38,160 crore in 2016-17. Says Mohapatra: “While male retail borrowers increased from 13,711 in 2012-13 to 28,112 in Q1 2017-18, female retail borrowers are up from 3558 in 2012-13 to 7281 in Q1,2017-18.”
HOME LOAN GROWTH
Under the retail loan segment, the bank has concentrated on home loans in the last 5 years. Home loan outstanding has increased to `23,212 crore in Q1 2017-18 from `22,248 crore as of 31 March 2017, registering 15.28% growth. Growth has been happening across all the zones, gender and priority sectors over the past 5 years. Mohapatra says while male customers doubled from 8227 in 2012-13 to 16548 in Q1 2017-18, female customers have more than doubled from 1889 in 2012-13 to 4090 in Q1,2017-18.
The number of accounts under affordable housing has increased to 74,964 in Q1, 2017-18 from 66,512 a year ago. The corresponding loan outstanding amount has increased to `500 crore, registering yoy growth of 18.48%.
The bank has implemented the Prime Minister’s Awas Yojana for low income group, economically weaker section and middle income group. Mohapatra explains: “We are laying special emphasis on promotion of affordable housing all across India by educating customers vigorously. We have been trying to educate and popularize such schemes at the ground level all across our zones.”
The bank has been organizing various campaigns in all its zones on a month on month basis. It has been aggressively advertising its retail products through hoardings, electronic and print media. The bank is also reaching out to customers through various events and campaigns on a regular basis to cross sell various products.”
EXPOSURE & NPA
Home loans account for the highest exposure among the bank’s retail portfolio as of Q1 -2017. It increased by `3077 crore from `20135 crore and its NPAs are up by `294 crore to `826 crore. It is followed by loan against property, whose exposure and NPAs are up by `1023 crore and `83 crore respectively. Surprisingly, education loan NPAs are also up by `80 crore from `190 crore a year ago. Mohapatra explains: “For retail loans, we are carrying out proper due diligence exercise along with adequate KYC to have a proper control and risk profiling system in place.”
SOFTWARE FOR NPA
The bank has been continuously upgrading its internal systems and procedures to contain NPAs and slippages. For retail loans, stringent measures are adopted bank-wide including system check and controls with proper credit monitoring both pre and post disbursement. Mohapatra says an inhouse dashboard developed by the bank’s IT team generates, analyzes data on regular basis.
The bank’s target for retail loans for the current FY is `50,194 crore and for home loans `27,308 crore. Mohapatra says the bank is focusing on increasing its home loan portfolio across various geographical sectors spread pan India including urban/ semi-urban and rural areas.
Dinabandhu Mohapatra wishes to increase loans to professionals & self-employed by approximately 8% over 2-3 years down the line