Having already bought `1,400 crore of mortgage portfolio in the first half of this financial year, Federal Bank on Wednesday said it will continue with such purchases and is closing in on another transaction. The bank purchased a `100-crore portfolio from a non-banking lender in the June quarter and followed it up with another `1,300-crore deal in the following quarter.
“We are working on another such transaction and the amount is meaningfully high, if not as big as the previous one,” managing director and chief executive Shyam Srinivasan told reporters here. He explained that apart from giving a spread on the margin, such purchases of portfolios help the lender in building newer customer relationships. He also said that the dearth of capital in many lending entities and the bank’s comparatively stronger buffers are resulting in such deals.
The bank bought the ` 1,300-crore portfolio from a triple A-rated NBFC, which will minimise the risk of defaults. It posted a retail loan growth of 21.7 per cent for the reporting quarter, which would shoot up to 27 per cent if the portfolio buy is also included.