Future perfect

Mumbai, Nov. 22: ICICI Bank hopes to collect Rs 1,300 crore monthly in savings accounts by leveraging its network of branches. India’s No. 2 bank is opening 580 branches in this fiscal.

The bank has been focussing on enhancing the share of current and savings account (CASA) deposits as part of its cost reduction strategy. The bank had set a target to raise the ratio of CASA to its total deposits this fiscal to 33 per cent, a jump of 430 points over the last year.

During the second quarter of this fiscal, savings account deposits stood at close to Rs 4,900 crore, while CASA deposits were at Rs 9,000 crore. The CASA ratio rose to 36.9 per cent from 30.4 per cent in the preceding quarter.

The growth in CASA deposits is attributed to the addition of branches and the increased flow of money into the system because of higher salaries of government workers in the wake of the recommendations of the Sixth Pay Commission.

Companies raising funds through initial public offerings and qualified institutional placements have also boosted the current and savings accounts deposits.

Senior officials of the bank are of the view that the growth will be maintained in the coming months.

At a recent interaction with analysts, N.S. Kannan, chief financial officer and executive director of ICICI Bank, said the bank would continue to see close to Rs 1,300 crore or more coming into savings accounts because of the network expansion.

“With the addition of branches, we are on target on our savings account deposits strategy’’, he had said.

ICICI Bank has over 1,500 branches in the country. It has opened close to 100 in the first half of the fiscal, and around 480 will be added in the second half, taking the total to more than 2,000.

The stress on higher CASA mix is part of the bank’s strategy that includes CASA improvement, cost control, better credit quality and capital conservation.

The bank has improved on each of these fronts from the beginning of this fiscal. It has brought down operating expenses by 8 per cent on a sequential basis. The proportion of high-risk unsecured retail loans such as credit cards and personal loans has been reduced to 6.6 per cent of the total loan book from 7.6 per cent in the first quarter.