Analyst Meet / AGM - Analyst Meet
Expect loan growth of 12-14% for FY2017
State Bank of Mysore conducted and analyst meet on 26 April 2016 to discuss its financial results for the quarter and year ended March 2016. Sharad Sharma MD of the bank addressed the meet.
Highlights:
* Bank has recorded 12% decline in the net profit to Rs 358 crore in FY16 over Rs 409 crore in FY15. Declining net profit was mainly driven higher provisions towards weak accounts classified as NPAs under Asset Quality Review (AQR) of the banking system conducted by RBI.
* An incremental provision on account of AQR amounted to Rs 381 crore in FY16. The additional slippages relating to AQR amounted to Rs 1272 crores from 14 accounts in FY16
* GNPA ratio of the bank increased to 6.56% at end March 2016 from 4% a year ago.
* Fresh slippages of advances increased sharply to Rs 1956 crore in Q4FY2016 of which Rs 601 crore related to AQR. Fresh slippages had stood at Rs 931 crore in Q3 with Rs 571 crore from AQR.
* Bank has recorded recoveries of Rs 169 crore, upgradations of Rs 723 crore and write Off of Rs 162 crore in Q4FY16.
* Bank has also sold Rs 181 crore of assets to asset reconstruction companies in Q4 and Rs 300 crore in FY16.
* Net interest margin (NIM) of the bank declined to 2.84% in FY16 from 2.98% in FY15. The higher slippages on account of AQR of the RBI and reduction in base rates mainly contributed to the decline in NIMs in FY2016.
* The restructured advances of the bank have declined to Rs 1730 crore at end March 2016 from Rs 3581 crore at end March 2015. About Rs 931 crore of restructured advances slipped to NPA category in FY16 and Rs 310 crore into 4 QFY16.
* Bank has invoked strategic debt restructuring for 7 accounts with the exposure of Rs 1300 crore in FY16 bank also conducted 5/25 refinancing for 10 accounts with the exposure of Rs 1000 crore in FY16.
* NNP A + restructured advances have declined to 7.19% from 8.82% a year ago.
* Bankers conducted sales of Rs 170 crores of asset to asset reconstruction company in q4
* Bank has posted strong 24% increase in fee based income, while bank has maintained cost to Income ratio.
* Bank has CRAR ratio of 12.43%, which is sufficient to take care of its loan growth.
* The loan book of the bank increased 4% to Rs 55418 crore at end March 2016 over March 2015. Bank is targeting loan growth of 12-14% for FY2017.
* Bankers recorded healthy 90 bps improvement in Casa ratio to 34.6%. Bank has sharply reduced the share of high cost bulk deposits to 1.2% from 6.2% a year ago which has further declined to nil as on date.
* Bank has recorded increase in the share of retail advances to 50% of the total loan book at end March 2016. On the other hand, bank has reduced the share of Corporate loans to 50% from 65% 3 years ago.
* Bank does not have any exposure to UDAY scheme. Bank has loan exposure to the SEBs of Delhi, Tamil Nadu and Karnataka which have not participated in the UDAY scheme.
* The share of digital transaction stood at 50% and Bank proposes to improve the share of digital transaction to the parent SBI level of 70%.
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