Mumbai: Indian Overseas Bank is likely to see improvement in net interest margin (NIM) in the current quarter as it is repricing its bulk deposits, a top bank official said Friday.
"We have around Rs 19,000 crore of bulk deposit which will be matured in the current quarter and will subsequently repriced. This is likely to boost our NIM by around 20-25 basis points and we hope have a NIM of around 2.8 percent in the fourth quarter," bank's Executive Director ADM Chavali told reporters on the sidelines of an analyst meet here.
The NIM of the Chennai-based public sector bank was at 2.51 percent in the third quarter of the current financial year, when it reported a 7 percent growth in net profit at Rs 116.50 crore against Rs 108.27 crore a year ago.
Bank Chairman and Managing Director M Narendra attributed the growth in net profit to shedding of bulk deposits, which stood at 21.23 percent as against 34 percent in the corresponding period last fiscal.
On the move to trim the share of bulk deposit further, Chavali said the bank is trying to reduce it to around 15 percent by the end of the fiscal as directed by the government.
The bank also informed that the government will infuse Rs 1,000 crore into the bank this fiscal.
"The government will infuse Rs 1,000 crore into the bank, which will take the tier-I capital to over 8 percent from the present 7.33 percent," Narendra said.
He also said the bank is reorienting its strategy to have more retail focus in the near future. In this effort, the bank has announced recently to give home loans up to Rs 75 lakh at its base rate of 10.5 percent, which has come out after the RBI cut repo and CRR rates by 0.25 percent each in January 29 policy review.
First Published: Friday, February 01, 2013, 19:02