Bangalore-based public sector lender Vijaya Bank is likely to close this fiscal with net interest margin (NIM) of 2.85-3% despite the difficult economic environment, a top bank official said.
"We hope to post a net interest margin (NIM) of 2.85-3% in the current financial year," Vijaya Bank Executive Director Subhalakshmi Panse said.
She said the bank was relying on garnering CASA deposits, and shedding bulk deposits to increase NIM in the current quarter.
Referring to growth in bad assets in the third quarter, Panse said those NPAs were on account of the high interest rate regime which had resulted in slippages in some large accounts.
"Our bank has shifted to system-based recognition of NPAs from last March. So, whatever slippages are being seen these days, are due to the present high interest rate environment," she said, adding that the bank has restructured some of the loan accounts, which has resulted in higher provisioning requirements in the last quarter.
Gross non-performing assets (NPAs) of the public sector lender increased to 2.98% in the quarter ended December, as against 2.54% in the previous quarter.
Referring to the possible movement of NPAs in the next quarters, Panse said although it has plateaued, it is difficult to give a figure.
The bank posted 18.4% drop in net profit at Rs 124 crore in the third quarter ended December, against Rs 152 crore in the year-ago period.
Net interest income of the bank dropped by 11.7% to Rs 474 crore from Rs 537 crore in the same period last year.
