Vijaya Bank expects NIM at 3% in current fiscal

Vijaya Bank is likely to close the current fiscal with a net interest margin of 2.85-3 percent despite the prevailing difficult economic environment, a top bank official said.

“We hope to post a net interest margin (NIM) of 2.85-3 percent in the current financial year,” said Ms Subhalakshmi Panse, Executive Director, Vijaya Bank.

She said the bank is relying on garnering Casa deposits and to shedding bulk deposits to increase NIM in the current quarter. Referring to growth in bad assets in the third quarter, Ms 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 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 bank increased to 2.98 percent in the quarter ended December against 2.54 percent in the previous quarter.

The bank posted an 18.4 percent drop in its net profit to Rs 124 crore in the third quarter of the current financial year as against Rs 152 crore reported a year ago.

Net interest income of the bank dropped by 11.7 percent to Rs 474 crore as against Rs 537 crore reported in the same period last year.