South-based Lakshmi Vilas Bank expects to close the fiscal with a gross NPA of less than 3% against the 4.5% levels observed during the end of September quarter, on the back of improved recovery.
"We will be at 3% by March as compared to 4.5% levels we reported in September...We expect recoveries in 2-3 accounts during this quarter," the bank's MD and interim CEO K S R Anjaneyulu said.
Without specifying the amount likely to be recovered, he said the bank was confident of recovering money from the three clients from diverse sectors and there has already been a communication received from them showing readiness to repay.
The bank had posted a 4.50% level of gross non-performing assets (NPAs), or Rs 490 crore in absolute terms, which is one of the highest among private banks. It is yet to declare its December results.
The bank has also undertaken an expansion drive and hopes to add a fourth to its total branches by the end of May, Anjaneyulu said.
"We have received RBI nod to add 71 branches to the existing 291 and will be inaugurating those by end May and then reapplying for more," he said.
About 28 of the new licences are for Tier-I cities, which give higher revenues, he said, adding that the bank will invest an average of up to Rs 15 lakh per branch.
Courtesy these efforts, the bank is targeting to grow its percentage of the low cost CASA (current account savings accounts) deposits from 14% now, one of the lowest in the industry.
"We see the CASA growing to 17% by March 2013 as all the 28 tier-I branches will be opened by then. In June quarter, as all our branches open, we target it to be at 20% and 25% by March 2014," he said, adding that each new branch will seek to have 40% CASA deposits.
The lift in the CASA number will also be accompanied by an expansion of margins, Anjaneyulu said, adding that the September's number of 2.4% will grow to 3% by December, 2013.
The bank is confident of achieving its targeted 23-24% jump in advances this year and has already witnessed a 18% surge, Anjaneyulu said.
Anjaneyulu, who was earlier serving as an executive director, took over as the MD and interim CEO in November 2012 following the resignation of P R Somasundaram due to personal reasons.
