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Analyst Meet / AGM - Analyst Meet

Expects stable NNPA ratio at 3% by end March 2016

Syndicate Bank

30-Jan-2016, 06:43
Syndicate Bank conducted the analyst meet on 29 January 2016 to discuss the financial performance of bank for the quarter ended December 2015. Arun Shrivastava, MD&CEO of the bank addressed the meet:
Highlights:

The bottomlines of the bank were impacted by higher provisions for NPA. Fresh slippages of advances jumped to Rs 2787 crore in Q2FY2016.

The fresh slippages of advances was mainly caused by the implementation of RBI's advice to classify certain weak accounts as NPA and make provisions. RBI in its Asset Quality Review (AQR) of the banking system has identified certain weak accounts in the banking system, which has to be classified as NPAs over last two quarters of FY2016.

Bank has recognized about Rs 1400 crore of accounts related to AQR in Q3FY2016, while similar quantity of weak accounts would be considered in Q4FY2016.

However, the balance of AQR accounts has some good accounts. Also, the bank has made provision at the higher rate of 17% against the regulatory requirement of 15%, which would ensure moderate provisioning pressure for Q4FY2016.

The loan book of the bank increased 12%, while the Retail, Agriculture, MSME (RAM) advance moved up 18% at end December 2015.

NIM of the bank declined to 2.32% in Q3FY2016. The base rate cut had an impact of Rs 75-80 crore on interest income loss in Q3FY2016, which is expected at Rs 120 crore for FY2016.

Restructured advance book of the bank dipped to 3.77% of advances at end December 2015 from 4.03% at end September 2015.

Bank expects the fresh slippages to remain stable in Q4FY2016. Bank also expects to maintain stable GNPA ratio at 4.0-4.5% and NNPA ratio at 3% at end March 2016.