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Analyst Meet / AGM - Analyst Meet

Proposes to reduce GNPA to 2% and improve NIM to 3% in FY2015

Syndicate Bank

09-May-2014, 02:28
Syndicate Bank conducted the analyst meet on 08 May 2014 to discuss the financial performance of bank for the quarter ended March 2014 and the prospects of the bank. SK Jain, CMD and along with other colleagues addressed the meet:
Highlights:

As per the bank, the economy is not in a good shape, while banking industry is facing headwinds. The economy did not witness any improvement in the investment cycle during Q4FY2014. However, the GDP growth is expected to be around 6.5% in FY2015 and FY2016.
As per the bank, the absence of MAT credit in FY2015 mainly impacted the bottomline of the bank. Excluding the MAT benefit for FY2013, the PAT was up 20% in FY2014.
About 120 executives of the bank from all regions and levels deliberated the bank's long-term plan for year 2020 at two days conference. Bank expects to announce its vision 2020 targets shortly. Bank has targeted to touch the business level of Rs 10 lakh crore by 2020.
On asset quality, bank expects the fresh slippages to ease sharply to Rs 300-400 crore per quarter from Q1FY2015 onwards. As per the bank, all major large accounts witnessing stress have already slipped. However, the bank also highlighted that its biggest NPA account has exposure was at Rs 350 crore.
Bank has reduced Gross NPAs during Q4FY2014 without any sale of bad loans to asset reconstruction companies, while there was no aggressive write-off of bad loans.
Bank has enhanced focus on recoveries, while it has created separate department for managing stressed assets.
Bank is also hopeful of strong recoveries; as about 60% of the NPAs is in the accounts with lower than Rs 20 crore per account exposure. The accounts with lower exposure also has a good collateral coverage, improving the recovery prospects.
With lower slippages and strong recoveries, bank expects to reduce the GNPA ratio to 2% by end March 2015 from 2.62% at end March 2014.
On fee income front, bank is targeting the strong momentum in the government businesses targeting about 10-12% growth in the fee from government business.
Bank is focusing on brand development. It is planning to appoint consultant from brand development.
Bank proposes to improve the CASA ratio to above 31% by end March 2015. It has targeted the saving bank account deposits growth of 22% for FY2015.
Bank has continued to meet priority sector target along with the achievement of all sub-targets.
On the advances front, the bank is heavily focusing on MSME segment from growth with above 30% growth targeted for the segment in FY2015. The mid-corporate and retail segment are also in focus for advance growth.
On the international business front, bank proposes to change the business model raising the share of high yielding loans and targets to improve the overseas NIMs to 0.5-0.6% in FY2015 from 0.34% in FY2014.
Bank proposes to improve the overall NIM to 3.0% in FY2015 from 2.79% in FY2014.
Bank proposes to improve the CRAR to 12%.
Bank intends to add 350 branches during FY2015. However, bank plans to boost ATMs network to 3500 ATMs by end June 2014 from 1946 ATMs at end March 2014 and further improve to 4200 ATMs by end March 2015.
Most of the new branches are also planned to be added in H1FY2014 to support growth in CASA deposits. Bank is also opening five more regional offices.
Bank is also taking steps to open branches in South Africa, Dubai, Hong Kong, Thailand and China.
The number Point of Sale (POS) machines are targeted to be increased from 1000 at end March 2014 to 1700 by end June 2014 and 7500 by end March 2015.
Bank has targeted advances growth of 21% and deposit growth of 18% for FY2015.
On treasury department front, bank is planning to recruit about 25 dealers during FY2015.
Bank is planning the QIP of Rs 1500 crore, which will be issued at appropriate time.
Bank has the restructuring pipeline of Rs 300-400 crore.
Bank plans to recruit around 5000 new staff in FY2015.