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Analyst Meet / AGM - Analyst Meet

Propose to raise branch network of 2000 branches in FY2015

Bank of Maharashtra

19-May-2014, 07:19
Bank of Baroda conducted an analyst meet on 15 May 2014 to discuss the financial results for the quarter ended March 2014 and prospects of the bank. Sushil Munot, CMD of the bank addressed the meet: Highlights:

Bank witnessed challenging macroeconomic and credit environment in FY2014.

On account of heavy fresh slippages of advances, the yield on advances declined in FY2014, despite good CASA deposits ratio.

Further, the cost of deposits increased causing sharp narrowing of margins in FY2014.

However, the fresh slippages of the bank dipped 33% in Q4FY2014 on sequential basis. Bank expects the fresh slippages to ease going forward.

CASA ratio is proposed to be improved, which would help to reduce the cost of deposits.

Bank is focusing on HNI business. The improvement in HNI business may help to reduce cost of deposits by 10-15 bps.

Bank has about Rs 13000 crore of advances at base rate, which it plans to substitute with higher yielding loans.

Bank has also increased the base rate by 15 bps to 10.4% in early FY2015.

Increase in staff cost in FY2014, was mainly on account of provision for wage revision for 17 months in one financial year i.e. FY2014.

Bank sold about Rs 247 crore of bad loans to Asset Reconstruction Companies (ARCs) in Q4FY2014. However, the bank has announced the timeliness performance incentive to the ARC for earliest recovery of bad loans sold.

Under the special one time settlement (OTS) scheme for bad loans below Rs 5 lakh, bank has made strong recoveries of Rs 80 crore closing about 9000 accounts.

With about 75% of NPAs being freshly slipped in to NPA category in FY2014, bank is expecting strong recoveries and upgradations in FY2015.

Bank has overachieved the priority sector lending target at 42%.

Bank is planning to touch a branch network of 2000 branches in FY2015.