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Analyst Meet / AGM - Analyst Meet

Expects to reduce net NPA ratio to 3% by March 2020

Bank of Baroda

01-Nov-2018, 04:17
Bank of Baroda conducted an analyst meet on 31 October 2018 to discuss the financial results for the quarter ended September 2018 and prospects of the bank. PS Jayakumar, MD&CEO of the bank addressed the meet:
Highlights:

The bank has posted healthy core operating performance in the quarter ended September 2018. The net interest income of the bank has increased 21%, while the bank has posted 14% growth in the core fee income in Q2FY2019. The fee income of the bank is showing strong traction, while bank is strongly focusing on growing and broad basing fee income to offset the impact of volatility in treasury income.
The domestic loan growth was strong at 20% driven by retail loans growth of 33%. The share of retail loans has increased to 21% from 19% a year ago.
The bank has continued to maintain domestic CASA deposits ratio above 40% end September 2018.
The bank has improved margin to 2.61% in Q2FY2019 from 2.34% in Q2FY2018.
The bank has improved asset quality in Q2FY2019, while slippages of loans declined to seven quarter low level in Q2FY2019. The provision coverage ratio improved above 70% end September 2018.
The bank has exhibited decline in GNPA as well as NNPA ratio in Q2FY2019, despite the impact of Rs 534 crore on account of exchange translation.
The bank has exposure to Rs 21985 crore of loan under NCLT, with healthy provision coverage of 65.6% end September 2018. The recoveries in NCLT related exposure stood at Rs 1231 crore in Q2FY2019.
About 84% of the fresh slippages in Q2FY2019 came from watchlist of stressed accounts, which has declined to Rs 8500 crore end September 2018. The watch list also includes the part of stressed exposure to IL&FS group.
The bank aims to reduce net NPA ratio to 3% by March 2020.
The exposure to NBFC sector stand sat Rs 71961 crore end September 2018.
The bank has made provision of Rs 241 crore towards its part of exposure to IL&FS group, which is showing stress. As per the bank, of the total exposure about 18% is towards 4 road projects with COD accomplished, 22% to 3 renewal power projects with COD completed and performing well, 10% to 1 thermal power projects with second PPA signed, 17% to international business performing well. Further, the bank has exposure to 2 NBFCs amounting to 15% and has exposure to ITNL, where bank has taken provisions.
The securities receipt book of the bank stood at Rs 726 crore, while there is no addition it during last few years as bank focus on any asset sale for only cash basis.
The non-fund exposure to NPA account stands at Rs 2600 crore with provisions of Rs 850 crore.
With regard to merger with Dena and Vijaya Bank, the bank expects the effective date of merger to be 1 April 2019.