Analyst Meet / AGM - Analyst Meet

28-Apr-2014, 05:53
State Bank of Bikaner and Jaipur conducted an analyst meet on 23 April 2014 to discuss the financial results for quarter ended March 2014 and prospects of the bank. B Sriram, Managing Director of the bank addressed the call:

Highlights:

• Bank recorded 34% surge in the net profit in the quarter ended March 2014, supported by healthy growth in interest as well as non-interest income.

• Bank has witnessed sharp increase net interest margin (NIM) to 3.65% in Q4FY2014 from 3.14% in Q4FY2013, which was supported by surge in CASA ratio to 39.51% at end March 2014 from 35.88% at end March 2013. Credit-deposit ratio of bank also surged to 87% at end March 2014 from 82% at end March 2013, supporting improvement in NIMs.

• Bank expects the improving trend in net interest income for last four quarters to continue going forward.

• The healthy growth in the non-interest income of the bank in Q4FY2014 was driven by surge in recoveries in written off accounts.

• Deposits of the bank rose at moderate pace of 2% yoy to Rs 73874 crore at end March 2014, as CDs and high cost deposits declined 35.3% to Rs 6471 crore at end March 2014. Bank proposes to further reduce share of CDs and high cost deposits to Rs 5500 crore by end March 2015.

• On the other hand, the CASA deposits increased 13% gaining the share to 39.5% at end March 2014 from 35.8% at end March 2013.

• Bank is targeting the deposit growth of 12% for FY2015, to be mainly driven by 16% growth in retail term and CASA deposits.

• Fresh slippages of advances to NPA category stood at Rs 817 crore, while the recoveries and upgradations were at Rs 497 crore in the quarter ended March 2014.

• Bank has done fresh restructuring of Rs 304 crore in the quarter ended March 2014. The standard restructured advances stood at Rs 4621crore at end March 2014 compared to Rs 3379 crore at end March 2013.

• Bank has restructuring pipeline of Rs 700 crore at end March 2014.

• Provision coverage ratio of the bank was 56.67% at end March 2014 as against 58.64% previous year. Bank proposes to improve the provision coverage ratio above 60%.

• One account with the exposure of Rs 250-300 crore failed to be restructured and slipped to NPA category in Q4FY2014. Bank expects to restructure the same account and upgrade from NPA category in Q1FY2015.

• Bank also expects upgradations of two account with the exposure of Rs 50 crore each in Q1FY2015, while bank has also targeted recoveries of Rs 100 crore in the retail segment during Q1FY2015.

• Meanwhile, the bank is expecting the resolution for Rs 250 crore in Q1FY2015 out of Rs 750 crore bad loans sold to Asset Reconstruction Companies (ARCs) in FY2014.

• Thus, bank expects reduction of about Rs 750 crore of NPAs during Q1FY2015.

• Bank is cautious on asset quality, while expects the asset quality stress to continue for next two quarters.

• Bank does not have any capital raising plan for FY2015, while may raise some Tier II instruments.

• Bank is targeting the advances growth of 12% in FY2015.

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