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Analyst Meet / AGM - Analyst Meet

Expects Gross NPA level at Rs 45000-50000 crore by end March 2017

Bank of Baroda

12-Aug-2016, 11:17
Bank of Baroda conducted an analyst meet on 11 August 2016 to discuss the financial results for the quarter ended June 2016 and prospects of the bank. PS Jayakumar, MD&CEO of the bank addressed the meet:
Highlights:

The global deposits of the bank fell 5% and global advances dipped 11% at end June 2016 over June 2015. The bank expects to continue to de?]grow in the next quarter also as rebalancing of will continue.
The decline of low yielding overseas loans is positive for margins, while bank is also reducing high cost bulk deposits helping to reduce cost of funds.
The share of retail deposits in total deposits stood at 78% at end June 2016.
The overseas book is also consciously reduced, mainly driven by rundown of low yielding buyers credit, which is replaced with local credit. The bank also proposes to exit geographies where funding in local currency is not there. Local credit is 29% of overseas book at end June 2016.
The opex has declined in Q1FY2017 in the absence of wage revision liability of Rs 262 crore in Q1FY2016.
The fresh slippages of advances stood at Rs 6096 crore (Fresh Rs 5527 crore and rise in existing NPAs of Rs 569 crore), of which Rs 1200 crore of slippages related to weakness in small accounts and were automatically recognized under new process. The corporate book witnessed slippages of Rs 1380 crore, while rest Rs 3000 crore slippages were contributed by agriculture, SME and retail segments.
The upgradations were healthy at Rs 1401 crore in Q1FY2017. About 90% of upgradations were contributed by large corporate segment. The bank has upgraded one large account from restructured NPA to restructured standard in Q1FY217.
The bank has continued to maintain provision coverage ratio at healthy level.
The SMA ?] 2 category loans of the bank has declined to Rs 10986 crore at end June 2016 from Rs 13153 crore at end March 2016.
Bank expects Gross NPA level of Rs 45000 crore to Rs 50000 crore by end March 2017. As per the bank, the recoveries will be back?]ended, while slippages will be front?]loaded.
Bank has not conducted any refinancing under 5/25 scheme, and strategic debt restructuring during the quarter.
Bank is looking for opportunities to monetize investments in subsidiaries and Joint Ventures for release of capital.