Cosmos Bank Ups Tech Budget To 9% Of Operating Expenses For FY25
The cooperative bank, which was impacted by a cyber attack in the recent past, has been spending 6-7% of the operating expenses, or 10-12% of profits in technology, its Chairman Milind Kale told reporters.
Cosmos Bank is aiming to increase spends on technology to up to 9% of its operating expenses in 2024-25, from the present 7%, a top company official said on Tuesday. The cooperative bank, which was impacted by a cyber attack in the recent past, has been spending 6-7% of the operating expenses, or 10-12% of profits in technology, its Chairman Milind Kale told reporters.
There is a need to pay more attention towards the technology aspect going ahead, Kale said, adding that in FY25, it will raise the spends to up to 20% of the profits, or 8-9% of operating expenses.
He said the bank is cutting costs by reducing expenses on human resources through more automation and higher utilisation of resources to ensure that it is able to spend on technology.
In FY25, the Pune-headquartered lender reported a net profit of Rs 384 crore and an improvement in the gross non-performing assets ratio to 3.22%.
Kale said the bank, which has merged 18 banks into itself, is not actively seeking anything new on the mergers front and will be seeking to consolidate the two deals executed in FY24.
It is aiming to increase the proportion of loans up to Rs 1 crore to 50% of the book from the present 43% by the end of the current fiscal, Kale said, adding that doing so will help it meet the RBI mandate.
For doing this, it will be upping the reliance on its 170 branches, he said, adding that retail loans like vehicle and home finance, and small business loans will grow faster to achieve the 50% target.
It lends to the under Rs 1 crore loan segment at a competitive interest rate of up to 9%, Kale said, exuding confidence of being able to achieve the target.
If the regulator agrees, it plans to open another 5-10 branches in FY25, he said, suggesting this is not a priority area.
Both the deposit and the credit growth are aimed at remaining stable at 15% in FY25, Kale said, adding that the credit deposit ratio is stable at 75% and it has not had to dip into SLR Holdings to meet loan demand.
He admitted that small finance banks are eating into the cooperative banks' business and the need for the latter is to work like the former by proactively reaching out to people.
However, the bank does not have any plan to convert into a small finance bank, Kale added.
