Total income of the city-based bank rose 11.97 per cent to Rs 8,960 crore during the quarter ended December 31 from Rs 8,002 crore reported 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 V R Iyer told reporters here.

The public sector bank reported 11.65 per cent rise in Q3 net interest income (NII) to Rs 2,308.46 crore, while non-interest income rose 9.97 per cent to Rs 937.15 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 per cent compared to 2.55 per cent reported in the same period last fiscal.

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

The lender posted a 13.63 per cent rise in deposit to Rs 3,49,117 crore and 20.27 per cent rise in credit to Rs 2,80,356 crore by the end of December quarter.

"We hope advances will grow by 17-18 per cent in the current fiscal with a deposit growth of 15 per cent," 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 per cent by the end of FY13 and it has already shed around Rs 21,000 crore from the bulk deposit from the June quarter.

"Our bulk deposit stood at around 18 per cent by the end of December and we hope to bring it down 15 per cent in the near future, as desired by the Government," Iyer said.

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

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

"We hope to reduce gross NPAs to 2.9 per cent and net NPAs to 1.8 per cent by the end of the fiscal," Iyer said. On the restructured accounts, the bank saw an addition of around Rs 2,300 crore in the last quarter, totalling the total recast loan book to Rs 15,937 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 per cent with a tier-I capital of 7.64 per cent.

"The Government will infuse Rs 809 crore in FY13, which will increase our CAR to around 11 per cent. 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.

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