Mumbai: Indian Overseas Bank (IOB) on Monday cut its credit growth target for the fiscal to around 16-18 percent from 22 percent due to the slowdown in economic activities.
"Earlier, I was saying we will get a credit growth of 20-22 percent for the fiscal, but now given the response in the first half and the prevailing economic conditions, we feel it will come to 16-18 percent," the bank's Chairman and Managing Director M Narendra told reporters here.
The Chennai-headquartered public sector bank has notched up a 13.6 percent year-to-date growth in advances till the end of the second half, he said.
The lender also reported a steep dip in the September quarter net to Rs 158.43 crore from Rs 207.46 crore a year ago.
Narendra attributed the fall in net to an increase in stressed assets, a one-time tax provisions coupled with a dip in the net interest income due to base rate cut.
Its net interest margin also contracted to 2.46 percent as compared to 2.46 percent compared to 2.86 percent in the year-ago period, which was attributed to the base rate cut of 0.25 percent during the quarter.
Narendra said the bank is targeting to get the base rate back to 2.86 percent levels and will be focusing more on the retail side, especially on the liabilities front.
On the stressed assets, he said the bank's gross non- performing assets ratio jumped to 3.87 percent of the advances from the 3.07 percent a year ago and 2.97 percent in the previous quarter.
Narendra also said that the Department of Financial Services in the Ministry of Finance, has called a meeting of the recovery heads of all the state-run banks to discuss NPA management tomorrow and the day after in Delhi.
Narendra conceded that this has come at an elevated levels and added that even though the stressed assets are going up, IOB will devote more focus on the recoveries to bring down these ratios. The bank has recovered Rs 555 crore so far this fiscal out of a target of Rs 2,000 crore, he said.
On the incremental slippages, which has gone to Rs 2,600 crore this fiscal, he said the bank is expecting it to touch Rs 4,000 crore by the end of the fiscal.
It added Rs 1,231 crore to its restructured book during the reporting quarter from 11 accounts, he said, adding, the total restructured book now stands at Rs 14,775 crore, or 9.63 percent of advances.
He, however, stressed that there is no concern on the restructured assets front as 97 percent of them are serviced, though in a delayed manner.
The scrip settled at Rs 73.70 at 1445 hrs, down 1.14 percent on the BSE on Monday.
First Published: Monday, October 29, 2012, 18:21