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Analyst Meet / AGM - Analyst Meet

Proposes to improve CRAR to 12% by end March 2014

State Bank of Travancore

06-Nov-2013, 05:13
State Bank of Travancore conducted an analyst meet on 06 November 2013 to discuss the financial results for quarter ended September 2013 and prospects of the bank. Sanjeev Krishnan, Managing Director of the bank along with other colleagues addressed the meet: Highlights:

Bank has network of 1022 branches (up 97 branches from a year earlier) and 1034 ATMs (up 85 ATMs from a year earlier) at end September 2013.

Staff strength stood at 14209 employees at end September 2013 up from 12742 employees at end September 2012

Gross NPA and restructured advances together stood at 6.87% of advances at end September 2013.

The net fresh slippages of advances to NPA category stood at Rs 313 crore in the quarter ended September 2013, which were mainly contributed by corporate segment at Rs 280 crore. The fresh slippages in the personal loans segment stood at Rs 21 crore, followed by agriculture at Rs 12 crore and SME at Rs 0.19 crore in Q2 of FY2014.

The recovery of NPA stood at approximately Rs 100 crore in the quarter ended September 2013.

Bank has restructured advances worth Rs 600 crore in the quarter ended September 2013 in addition to Rs 435 crore in previous quarter ended June 2013. Outstanding standard restructured advances of the bank stood at Rs 3114 crore at end September 2013.

As per the bank, the iron & steel and infrastructure segment is witnessing stress, which is expected to continue for next two quarters.

Bank expects the net increase in NPA of Rs 400-500 crore for second half of FY2014, while proposes to maintain the GNPA ratio steady at current level.

Bank has made provisions of Rs 91 crore for NPA, Rs 97 crore for restructured advances and Rs 67 crore for depreciation of investment in the quarter ended September 2013.

Bank has maintained advances growth at healthy pace of 17% to Rs 68552 crore at end September 2013, which is supported by corporate and personal loans segment growing 23% and 15%, respectively at end September 2013. Agriculture credit book was flat on YoY basis, as the excess rains in the home state of Kerala impacted the agriculture credit demand.

Bank has improved the CASA ratio to 26.8% at end September 2013 from 25.9% at end March 2013.

Including the profits for half year ended September 2013, the CRAR ratio is expected to be 40-50 bps higher.

The risk weighted assets of the bank stood much below total advances at Rs 55000 crore at end September 2013.

Bank expects capital infusion of above Rs 600 crore from parent State Bank of India and proposes to improve CRAR to 12% by end March 2014.

Bank has made sufficient provisions for pension and gratuity funds. Infact, bank is witnessing inflows from these funds instead of outflows.

Bank is targeting the advances growth of 21-22% for FY2014, and plans to ensure more diversification in the advances book.

As per bank, about 75% of the branch network is located in State of Kerala, which contributed about 80% of the bank deposits. However, the CD ratio in Kerala is lower at around 60%.