Analyst Meet / AGM - Analyst Meet

29-May-2018, 03:54
Bank of India conducted an analyst meet on 28 May 2018 to discuss the financial results for the quarter ended March 2018. Dinabandhu Mohapatra, MD&CEO of the bank addressed the meet:

Highlights:

• The business of the bank has declined 4%, driven by 19% decline in foreign business, while the bank has improved domestic business by 1% in FY2018. The domestic loan book has improved 3%, driven by 19% growth in retail loans.
• The bank has exhibited decline in share of corporate loans to 48% end March 2018 from 52% end March 2017, while bank the share of retail, agriculture and MSME loan has increased to 52% and bank aims to raise it further to 60% by March 2019.
• The bank is targeting loan growth of 8-10% for FY2019, while proposes to improve CD ratio to 75% by March 2019.
• The bank has exhibited elevated fresh slippages of loan worth Rs 12973 crore in Q4FY2018, of which Rs 5100 crore of slippages were on account of RBI's revised guideline on NPA recognition and resolution issued on 12 February 2018. Most of the slippages came from infrastructure - power sector, while 66% of the slippages were from the corporate sector in Q4FY2018.
• The bank has exhibited sharp jump in recoveries and upgraded to Rs 12956 crore in Q4FY2018, driven by recoveries of Rs 9200 crore of loans against SBLCs and banks expects to recover balance Rs 520 crore in Q1FY2019.
• The standard restructured loan book of the bank has declined to Rs 7630 crore end March 2018.
• The SMA-2 category loan book of the bank stood at Rs 7200 crore end March 2018.
• The sale of assets stood at Rs 420 crore in Q4FY2018 to asset reconstruction companies.
• The exposure to the power sector stands at Rs 30000 crore, of which Rs 12000 crore is towards public sector companies. The NPAs in the power loan book stands at Rs 6800 crore.
• The banks watch list of stressed account stands at Rs 12000 crore, which consists of standard restructured advances and SMA 2 category loans.
• The bank exposure to NCLT first list stands at Rs 8800 crore with provisions of 71%, while exposure to NCLT second list is Rs 3300 crore provisions of 64%. The bank also has exposure to other NCLT accounts at Rs 10000 crore with higher provisions of 79%.
• Thus, the bank has overall 73% provision coverage for NCLT exposure, while banks resolution of NCLT exposure to be profit accretive on account of excess provisioning. The resolution of Bhushan Steel account is expected to contribute Rs 500 crore of recoveries in other income in Q1FY2019.
• With regarding to rating profile of the loan book, the bank has exhibited Rs 9000 crore decline in BBB to BB rated exposure in Q4FY2018.
• The interest income reversals was heavy at Rs 1000 crore in the quarter ended March 2018.
• The bank is looking to non-core assets sale of Rs 1000 crore in FY2019.
• The bank has closed down 290 unviable ATMs in Q4FY2018, while the bank is also discussing the decision on 25 unviable branches. The bank is evaluating the performance of 7 international operation, of which bank has decided to close down two operation in Myanmar and Dubai.
• The bank has made provisions of Rs 100 crore for wage revision in Q4FY2018, assuming the wage hike rate of 2%.
• The bank expects to reduce credit cost sharply lower to 0.5-1.0% in FY2019.

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