The state-run lender’s net interest income rose 11.7% to Rs2,308.5 crore during December quarter, while its total revenues increased 12% to Rs 8,960 crore

Mumbai: State-run Bank of India (BoI) has reported 12.15% rise in net profit at Rs803.48 crore in the third quarter on the back of growth in core income supported by other income and decline in tax outgo, reports PTI.

Total income of the city-based bank rose 11.97% to Rs 8,960 crore during the quarter ended December 2012 from Rs8,002 crore a year ago.

“We have reported positive result in major parameters. Asset quality has seen marginal improvement in the third quarter, which is likely to be better in the future. Going ahead, our major focus will be on retail and SME segments,” BoI’s newly-appointed chairman and managing director VR Iyer told reporters.

The public sector bank reported 11.65% rise in Q3 net interest income (NII) to Rs2,308.46 crore, while non-interest income rose 9.97% to Rs937.15 crore.

During the period under review, other income and drop in tax outgo supplemented the overall profit numbers.

The bank however, reported a decline in its net interest margin to 2.36% compared to 2.55% reported in the same period last fiscal.

“Going ahead, we hope that NIM will improve with our focus on increasing the domestic credit to deposit (CD) ratio to around 75%,” Iyer said, adding it aims to achieve a NIM of 2.6% by the end of the fiscal.

The lender posted a 13.63% rise in deposit to Rs3.49 lakh crore and 20.27% rise in credit to Rs2.80 lakh crore by the end of December quarter.

“We hope advances will grow by 17-18% in the current fiscal with a deposit growth of 15%,” she said, adding the bank is emphasising on increasing the cheap CASA deposit base with shedding of bulk deposits.

She said the bank aims to maintain the CASA at the present level of 33.84% by the end of FY13 and it has already shed around Rs21,000 crore from the bulk deposit from the June quarter.

“Our bulk deposits stood at around 18% by the end of December and we hope to bring it down 15% in the near future, as desired by the government,” Iyer said.

On the asset quality front, net NPAs rose to 1.97% year-on year, from 1.78%. But sequentially it improved considerably from 2.04% in the September quarter.

Similarly, gross NPAs also rose to 3.08% from 2.74% a year ago, but q-o-q it improved from 3.42% in the September quarter.

“We hope to reduce gross NPAs to 2.9% and net NPAs to 1.8% by the end of the fiscal,” Iyer said.

On the restructured accounts, the bank saw an addition of around Rs2,300 crore in the last quarter, totalling the total recast loan book to Rs15,937 crore, mostly from some textile and steel accounts.

“Our total restructured book to the total outstanding loan has declined and I don't see any major restructuring pipeline going ahead,” she said.

On the capital adequacy front, the bank’s a CAR stood at 10.59% with a tier-I capital of 7.64%.

“The government will infuse Rs 809 crore in FY13, which will increase our CAR to around 11%. Though we don’t need capital for the next six months, we need to raise money for sustaining our growth,” she said, adding BoI will take a call on the instruments of fund raising going ahead.