The drive to bring down high-cost and bulk deposits resulted in 1.88 per cent decline in total deposits as on December 31, 2012 on a sequential basis for public sector lender Indian Overseas Bank.
Besides, the bank has also reported a growth of just 2.82 per cent in gross advances for the quarter ended December 31, 2012.
It's Chairman & Managing Director M Narendra said, “We reduced our bulk deposits from 34 per cent (as a percentage of total deposits) as on September 30, 2012 to 22 per cent as on December 31, 2012. That’s why overall deposits have declined.”
He added that the bank will strive to bring it down to 15 per cent by March 31, 2013.
Narendra was speaking to reporters on Sunday after inaugurating a string of dedicated centres to cater to large corporate and mid-corporate borrowers in Bangalore.
On a sequential basis, IOB's gross advances were up 2.82 per cent, from Rs 1,53,393 crore as on September 30, 2012 to Rs 1,57,734 crore as on December 31, 2012.
Deposits were down from Rs 1,89,115 crore as on September 30, 2012 to Rs 1,85,542 crore as on December 31, 2012. Narendra said that he expected the bank to post a net interest margin (NIM) of 2.75 per cent.