NEW DELHI: Managing director and CEO of Bengaluru-based Canara Bank Satyanarayana Raju has said the bank is focused on increasing its CASA ratio as its cost of capital is higher than other peer banks.
The CASA (Current Account and Savings Account) ratio of the bank at the end of September quarter was 31per cent much below other banks for whom the CASA ratio hovers around 40per cent. The bank’s CASA has shown an uptick of 28 basis points quarter-on-quarter.
In June Quarter, CASA was 30.98 per cent, while at the end September quarter, CASA increased to 31.27 per cent. In absolute numbers also, quarter-on-quarter CASA increased by Rs 8,000 crore. “We have almost launched more than 10 section-focused targets in the products.
We have launched for the last 20 months, which has attracted very well from various sections of the society, and that has garnered almost Rs 17,000 -18,000 crore in the savings bank account,” said Satyanarayana Raju in an analysts call.
He further said in order to keep cost of funds under control, the bank is using alternative resources like infrastructure bonds or raising window available with the RBI by pledging the excess SLRs. Raju informed the analysts that the bank’s cost of deposit is stabilized at 5.7per cent.
“Our net interest margin (NIM) has slightly come down as against the peer banks. It came down from 2.9 to 2.88. Though there is a lot of pressure on cost of deposits, we could manage this due to efficient management of our resources, alternative resources, and efficient lending at little higher cost,” the MD and CEO said.
He further reiterated that while most banks have lost their NIMs from a minimum 7 basis points to almost 12 to 13 basis points, Canara Bank has lost only 2 basis points. In the second quarter, the bank’s net profit rose by 11.31 per cent as its quarterly profits crossed Rs 4,000 crore for the first time.