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Analyst Meet / AGM - Analyst Meet

Expects slow improvement in asset quality

State Bank of India

15-Nov-2014, 03:30
State Bank of India conducted an analyst meet on 14 November 2014 to discuss the financial performance for the quarter ended September 2014 and prospects of the bank. Arundhati Bhattacharya, Chairman of the bank addressed the meet:
Highlights:

Better pricing has mainly helped the bank to maintain NIMs in Q2FY2015. Meanwhile, the increase in investment, amid credit growth slowdown, has weighed on NIMs. Bank proposes to maintain NIMs at current levels.
Bank has improved the international NIM to 1.2% at end September 2014 from 1.08% in June 2014. Bank expects further improvement in international NIM in H2FY2015.
Loan growth mainly moderated on high base, while credit to oil market companies declined sharply with easy access to them in commercial paper market.
In the absence of pick up in projects loans, bank has exhibited decline in income from loan processing charges.
Bank sees improvement in the agriculture segments asset quality in H2FY2015, with state of Andhra Pradesh and Telengana implementing agriculture debt waiver packages.
As per the bank, the mid-corporate and SME segment stress would continue until demand cycle picks up. Bank expects slower improvement in the asset quality going forward.
As per the bank, the major reason for restructuring of advances is the lower capacity utilization and lack of liquidity with the corporates.
Bank has conducted fresh restructuring of Rs 4351 crore of advances in Q2FY2015, while bank has a restructuring pipeline of Rs 3000 crore.
Bank has slowed sales of assets to asset reconstruction companies (ARCs) to Rs 400 crore in Q2FY2015.
Bank has enhanced focus on recoveries in written off accounts. Bank expects recoveries of about Rs 700 crore in H2FY2015.
Bank has initiated the system of dynamic rating for corporate account based on event specific revision in the rating against earlier annual or bi?]annual revision.
The slowdown in credit growth has helped bank to cut standard asset provision in Q2FY2015.
Bank has witnessed decline in CASA ratio, but the bank has improved market share in CASA deposits to 24.17% at end September 2014 from 23.59% at end June 2014.
Bank sees pick in transaction banking fees with higher ATMs fees. Bank has also revised the transaction-banking fee charged in line with the industry levels.
Bank plans to install about 2500 self-operated passbook printer at its branches by end December 2014. Infact, the bank also has facilitated access to online passbook though mobile banking.
Bank has stepped the collaboration of sales teams of subsidiaries to sale bank products.
Bank has touched the sales level of Rs 5000 crore on debit cards in October 2014.