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Analyst Meet / AGM - Analyst Meet

Recoveries and upgradations to match slippages in rest of FY2017

Bank of India

12-Aug-2016, 07:52
Bank of India conducted an analyst meet on 12 August 2016 to discuss the financial performance of the bank for the quarter ended June 2016 and the prospects of the bank. Melwyn Rego, Managing Director and CEO of the bank addressed the meet:

Highlights:

. The fresh slippages of advance was at Rs 6233 crore in the quarter ended June 2016, of which actual fresh slippages were Rs 5200 crore and rest were rise in existing NPAs.

. Of the fresh slippages, about 17 large accounts with the aggregate exposure of Rs 3281 crore were the major contributors to the fresh slippages in Q1FY2017. The large account slippages were well diversified across various sectors such as textiles, power, diamond, offshore drilling and real estate etc.

. Bank expects fresh slippages to be matching to recoveries and upgradations ahead, and GNPA ratio to decline with the pickup in loans growth.

. The bank has exhibited strong recoveries, upgradations, and write-offs at Rs 4237 crore in Q1FY2017. About Rs 395 crore of recoveries were made under SARFAESI. Bank has guided for recoveries and upgradations of Rs 17500 crore for FY17.

. Bank has not conducted any sale of assets to Asset Reconstruction Companies (ARCs) in Q1FY2017.

. The SMA-2 category loan book of the bank stands at Rs 13000 crore at end June 2016.

. Bank has conducted fresh restructuring of advances worth Rs 35 crore in the quarter ended June 2016. Outstanding standard restructured advances of the bank stood at Rs 11950 crore (3.1% of global advances) at end June 2016.

. Bank has exposure to 7 state power distribution companies with the loans of Rs 5882 crore covered under UDAY scheme. Bank has converted Rs 3533 crore discom loans to bonds, while conversion of Rs 1136 crore of loans to Punjab State Electricity Board into bonds is pending to be implemented. However, discom loans of Rs 920 crore and working capital facilities of Rs 103 crore are not to be converted to bonds under UDAY scheme.

. Under 5/25 refinancing scheme, the bank has exposure to 10 account with Rs 2186 crore of loans. Under SDR scheme, the bank has exposure to 15 account with Rs 3000 crore of loans.

. Bank is targeting loan growth of 6-8% for FY2017. The overseas loan book is expected to decline 9% driven by conscious rundown buyer's credit portfolio where the yields are extremely low. The domestic loan book growth is expected at 12% for FY2017.

. The loan book mix between corporate: retail stands at 52:48, while bank proposes to shift the mix 45:55 over next six quarters.

. The CASA deposits growth is expected at 19% for FY2017.