Analyst Meet / AGM - Analyst Meet

28-Oct-2016, 04:09
Syndicate Bank conducted the analyst meet on 27 October 2016 to discuss the financial performance of bank for the quarter ended September 2016. Arun Shrivastava, MD&CEO of the bank addressed the meet:

Highlights:

• On advances friend, the retail, agriculture and MSME (RAM) sector has recorded loan growth of 14%, while the priority sector lending segment has posted 8% loan growth at end September 2016. However, the overall loan book was moderate at 3%, as the industrial sector loans declined 5% at end September 2016 over September 2015.

• The share of corporate loan book stood at 52%, while retail loan book share was at 48% at end March 2016. The bank has improved the share of retail loan book to 49% at in September 2016, while it proposes to further raise the share of retail loan book to 50% by March 2017.

• The bank has exhibited improvement in its domestic net interest margins (NIMs) to 2.7% in the quarter ended September 2016. Bank expects to maintain domestic margins around current level going forward.

• Bank has recorded healthy 21% growth in its non interest income in the quarter ended September 2016, driven by 79% surge in trading gains.

• The bank has maintained asset quality stable in the quarter ended September 2016. Meanwhile, the bank improved provision coverage ratio from 52.67% at end June 2016 from 53.69% at end September 2016. Bank proposes to improve the provision coverage ratio to 55% by end March 2017.

• The fresh slippages of advances stood at Rs 1942 crore in the quarter ended September 2016, of which 50% of the fresh slippages were contributed by the corporate loan book, while about Rs 900 crore of slippages came from small accounts.

• Sector wise, the textiles sector contributed fresh slippages of Rs 400 crore, shipping Rs 215 crore, steel Rs 200 crore, EPC Rs 60 crore, and food processing Rs 40 crore etc.

• On small account side, the agricultural sector contributed fresh slippages of Rs 280 crore, while retail sector also contributed slippages of Rs 280 crore in the quarter ended September 2016. SME segment contributed slippages of Rs 400 crore in the quarter ended September 2016.

• The SMA 2 category loans of the bank stood at Rs 6900 crore at end September 2015. Within the SMA category loans, the largest account by size was at Rs 300 crore, where bank is likely to implement strategic debt restructuring (SDR).

• As per the bank, the total stressed asset with the banks stands at 12% of the loans at end September 2016.

• As per the bank, the fresh slippages of advances to decline to below Rs 1700 crore in Q3FY2017 and further moderate to Rs 1500 crore in Q4FY2017.

• The bank has implemented SDR scheme for 14 account with exposure of Rs 2254 crore, of which 6 accounts with exposure of Rs 1000 crore have slipped to NPA category.

• The bank has conducted refinancing for 9 accounts with exposure of Rs 2382 crore under 5/25 scheme, of which 4 accounts with exposure of Rs 1700 crore have slipped to NPA category.

• Bank is considering invoking Scheme for Sustainable Structuring of Stressed Assets' 2-3 accounts with the exposure of Rs 900 crore.

• The bank is targeting credit growth of below 10% for FY2016

• The bank is well capitalized with capital adequacy ratio at 11.35% at end September 2016.

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