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Our Bureau

Focus on low-cost deposits

MR M. BALACHANDRAN

Mumbai April 23 Bank of India has registered a 76 per cent growth in net profit at Rs 447 crore for the quarter ended March 31, 2007, against Rs 254 crore in the previous year. The net profit grew by 60 per cent at Rs 1,123 crore (Rs 701 crore) for the year ended March 31, 2007.

"We have made every effort to protect the bank's net interest margin and net interest income by containing the cost of deposits," said Mr M. Balachandran, Chairman and Managing Director, Bank of India.

Net interest income rose in the fourth quarter to Rs 968 crore against Rs 838 crore in the previous year. Other income rose to Rs 576 crore against Rs 324 crore in the year-ago period.

Low-cost deposits

Mr Balachandran said the focus was on garnering low cost deposits, which now account for 40 per cent of the deposit portfolio.

Domestic deposits grew by 22 per cent to Rs 94,744 crore for the fiscal ending March 31, 2007, and domestic advances were up 29 per cent to Rs 69,811crore. In the fourth quarter, the incremental increase in advances was 9.95 per cent.

Retail credit increased by 35 per cent to Rs 17,427 crore and constituted 25.7 per cent of the loan portfolio at the end of the financial year.

Mr Balachandran said he anticipated credit growth to be lower at 25 per cent and deposit growth at 20 per cent in the next financial year. He said the bank would try to augment income from treasury operations and fee-based income from non-banking products.

The net interest margin for the year improved to 3.70 per cent (3.55 per cent). The global (domestic and foreign) cost of deposits increased to 4.31 per cent (4.05 per cent).

More Stories on : Financial Performance | Public Sector Banks

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