Chennai January 6, 2014: Vijaya Bank hopes to take its CASA (current account/savings account) deposits to 25 per cent of its total deposits over the next two years to bring down its costs.
Its immediate target is to increase CASA to 20 per cent from 17.83 per cent of its total deposits now, according to V. Kannan, Chairman and Managing Director. Vijaya Bank will enhance its service to grow the CASA deposits.
This will “enable us to compete with our peers better,” he said. CASA of most other public sector banks stands above 35 per cent.
The move will also help the bank improve its net interest margin, from the current 2.12 per cent. “Anything above 2.7 per cent can be considered ideal, and we hope to get there in another 2-3 years,” he said. Kannan, who recently took over as the bank’s head, says CASA can be improved only by improving the bank’s service quality. “My first priority will be to ensure customer delight at every step.” Kannan was here to participate in the Vijaya Bank Workers’ Organisation’s 13th Regional Conference.
Govt share up
With a business of Rs 1.88 lakh crore, the bank is in the 17th place in terms of business size among the 19 public sector banks. “We expect the total business to cross Rs 2 lakh crore by the end of the current financial year,” he said.
Last week, the government approved conversion of its perpetual non-cumulative preference shares in the bank into equity. Following this, the government’s shareholding has gone up to 71.82 per cent from 55 per cent earlier.
According to Kannan, Vijaya Bank’s strength is its asset quality. Its gross non-performing assets (NPA) stand at 2.77 per cent, while that of most other public sector banks, it is above 4 per cent.
For the second quarter of the current financial year, the bank posted a growth of 10.4 per cent in net profit to Rs 136 crore, against Rs 123 crore in the comparable previous year quarter. It proposes to open 50 branches before the end of fiscal 2014, taking the total number of branches to 1,550.Business Line
