IOB to focus on increasing CASA, bad asset recovery in FY14

Indian Overseas bank (IOB) today said it will focus on increasing the share of the low-cost deposit base along with recovery of bad assets to contain NPA in the current financial year.

"Our major focus will be on enhancing current account, savings account (CASA) base with higher recovery from bad assets to contain NPA (non-performing asset) in the current financial year," Chairman and Managing Director of the Bank M Narendra told reporters here.

The public sector lender, which had witnessed 89% drop in net profit in the fourth quarter to Rs 59 crore due to rise in bad assets, has set a target to recover around Rs 2,500 crore in the ongoing fiscal.

IOB's gross NPA rose to 4.02% by the end of March 2013 from 2.74% in FY12. Net NPA increased to 2.50% from 1.35% reported a year ago.

Referring to recoveries from debt-ridden Kingfisher Airlines account, Narendra said the bank had retrieved around Rs 11 crore from this loan account from a total exposure of Rs 143 crore to the grounded private carrier.

He said the restructuring pipeline was likely to be around Rs 1,400 crore in FY14.

On low-cost deposit base, Narendra said the bank would try to ramp up its CASA base in the current fiscal. "We reduced our bulk deposit base to 15% in the last fiscal. This year, our focus will be on increasing CASA base."

The bank's low-cost deposit base, or CASA, stood at 26.51% by the end of March 2013.

Referring to growth in FY14, the bank said it expects an expansion of 15-18% in advances though this will depend on the overall interest rate environment.

Chennai-based IOB, which raised USD one billion through its medium term note (MTN) programme in the last two financial years, said it is planning to collect USD 2 billion through MTN in four to five tranches.

Narendra, however, didn't give any timeline for this fund raising. PTI DM RSY

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