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Analyst Meet / AGM - Analyst Meet

Restructuring pipeline stands at Rs 5500 crore for Q4FY15

State Bank of India

16-Feb-2015, 09:58
State Bank of India conducted an analyst meet on 13 February 2015 to discuss the financial results for the quarter ended December 2014. Arundhati Bhattacharya, chairman of the bank addressed the meet
Highlights:

Bank has improved expense ratio by 432 bps to 51.3% in Q3FY15, while bank expect expense ratio to decline further, going forward.
Bank has recorded Rs 602 crore of recoveries in written off accounts in Q3FY15.
As per the bank, the strong growth of 27% in the loans processing charges was driven by one-off charges.
About Rs 77000 crore of government, business has flown through the bank in Q3FY15.
Bank had to step up staff wage revision provision by incremental Rs 245 crore to Rs 716 crore in Q3FY15 to meet the required provisions as wage revision rate was finalized at 13%.
Bank has added 916 branches and 8811 ATMs in 9MFY15.
On the advances front, the gold collateralization in the agri gold loan book is consistently rising.
Bank has revamped SME loan products, so expects the asset quality of the SME loan book to move closer to the industry level in next two-three years.
Run down of Rs 13000 crore of advances to the oil sector was one of the major contributors to the loan growth moderation.
Fresh slippages of loans to the NPA category was lower at Rs 7043 crore in Q3FY15. The sector wise slippages stood at Rs 1400 crore from large corporate, Rs 3709 crore from mid corporate, Rs 2315 crore from SME, Rs 714 crore agriculture, Rs 191 crore from retail and Rs 64 crore from international segments.
Fresh restructuring of advances stood at Rs 4098 crore in Q3FY15. Bank expects fresh restructuring at higher side of Rs 5500 crore for Q3FY15.
Bank is planning a mega auction of bad assets on 14 March 2015, while also plans to sale more bad assets to the ARCs.
Bank expects about 8000-10000 of staff to retire every year for next three years.
As per the bank, SBI General Insurance is likely to achieve break even in FY16.
As per the bank, the spectrum auctions, PSU projects and renewable energy projects would be near term credit demand drivers.
Bank has hiked fee rates and expects better fee income growth in Q4FY15.
Bank is highly liquid. It's currently holding excess SLR investment of 5.5%.
Early warning system would be in place by 01 April 2014.
Bank plans to transit to risk based capital budgeting from April 2014.