Analyst Meet / AGM - Analyst Meet
Comfortable capital adequacy position, looks at monetizing non-core asset
IDBI Bank conducted an analyst meet on 17 February 2016 to discuss financial performance for the quarter ended December 2015 and the prospects of the bank. Bank management addressed the call.
Highlights:
Banks deposits rose 1% at Rs 234691 crore, while advances moved up 7% at Rs 219393 crore at end December 2015.
Retail-lending book galloped 25% to Rs 68945 crore, gaining share to 33% at end December 2015 from 28% at end December 2014. Domestic corporate book share eased to 56% at end December 2015 from 62% at end December 2014.
Within the industry advances, the infrastructure cornered 25% of the total loan book, basic metals at 6.7%, engineering 5.8%, mining 3.9%, chemicals 3.5%, construction 2.9% etc.
Within the retail book, the share of housing loans stood at 8.8% of the total loan book. The bank do not have any exposure to the state electricity boards.
The CASA ratio of the bank increased to 25% at end December 2015 from 24.2% a quarter ago and 21.9% a year ago. As per the bank, the bulk deposits share stands at 45% of total deposits. Bank expects about Rs 23000 crore of deposits to mature in Q4 and get repriced at lower level.
Bank has added new 6 branches and 22 ATMs in the quarter ended December 2015 pushing up the network strength to 1784 branches and 3225 ATMs at end December 2015.
NIM of the bank has declined to 1.98% in Q3FY2016 from 2.06% in the previous quarter, while remained higher compared with 1.85% in the corresponding quarter last year. The interest income reversal on account of fresh slippages stood at Rs 142 crore in Q3FY2016.
The bank has posted healthy 20% growth in core fee income to Rs 541 crore in Q3FY2016.
Fresh slippages of advances to NPA category surged to Rs 5839 crore in the quarter ended December 2015, driven by RBI Asset Quality Review (AQR) identifying certain weak accounts to be classified as NPAs and make provision.
Fresh slippages were contributed by sectors such as steel, Textiles, Road and Power etc.
Outstanding restructured book of the bank eased to Rs 17645 crore (8.5% of advances) at end December 2015.
The outstanding refinancing under 5/25 scheme stood at Rs 6000 crore for seven accounts, while bank has pipeline for refinancing under 5/25 scheme at Rs 3000 crore for 5 accounts.
The outstanding balance under Strategic Debt Restructuring (SDR) stood at Rs 3500 crore for 6 accounts
Bank did not conducted any asset sale to the Asset Reconstruction Companies (ARCs) in last 3 years.
The capital adequacy position of the bank is comfortable, while the management indicated that there is no capital infusion required for next two years. Bank also plans to monetize non-core assets such as stake in CARE, STCI, NSDL, ARCIL, CCI etc.
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