Back

Analyst Meet / AGM - Analyst Meet

Expects to improve NIM to 2.25% by end FY2014

Vijaya Bank

12-Aug-2013, 06:18
Vijaya Bank conducted an analyst meet on 05 August 2013 to discuss financial performance for the quarter ended June 2013 and the prospects of the bank. HS Upendra Kamath- Chairman and Managing Director addressed the meet:
Highlights:

NIM of the bank was mainly impacted by surge in deposits and moderation in credit growth leading to sharp decline in CD ratio. Bank expects the NIM to improve to 2.25% by end FY2014.

Bank has network of 1410 branches as on 05 August 2013, while proposes to increase the branch network to 1500 branches by end December 2013.

ATMs network of the bank stands at 930 ATMs, while bank proposes to roll out more new ATMs to reach Branch and ATM ratio of 1:1 by end December 2013.

With the moderation in advances growth, the CD ratio of the bank has dipped sharply. As per the bank, improving CD ratio will be top priority. On lending front, bank would focus on segments such as retail, priority sector, agriculture and MSME etc.

Bank has not raised any fresh bulk deposits from end June 2013, while deposit base of the bank has declined by Rs 3000 crore to Rs 1.02 lakh crore as on 05 August 2013.

Bank has the surplus liquidity of Rs 6000 crore and it is not in a hurry to raise deposit rates until credit growth picks up.

Bank expects the economic pains to continue for next nine-twelve months, while hopes to maintain credit quality with the strong credit quality performance for last two years.

Bank expects about Rs 102 crore (2 accounts) of advances slipped to NPA category to recover in the quarter ending September 2013.

Bank has the restructuring pipeline of Rs 350-400 crore comprising five accounts under CDR cell.

Bank aims to reach a business level of Rs 2.21 lakh crore with a deposit target of Rs 1.22 lakh crore and advance target of 0.88 lakh crore by end March 2013. However, bank would revise the targets soon depending the economic conditions.

Bank has not received any capital support from Government of India for last five years. However, bank has estimated the capital requirement of Rs 7400 crore for five years ending FY2018.

Accordingly, bank has requested the Government of India for capital infusion of Rs 1450 crore over two years ending FY2014 with demand to infuse 50% in FY2014 and rest 50%in FY2015.

Bank has also requested the Government for conversion of preference share capital to common equity capital, which will raise the Government shareholding in bank by 14-15%.