Analyst Meet / AGM - Analyst Meet

14-Nov-2016, 11:34
Bank of Baroda conducted an analyst meet on 12 November 2016 to discuss the financial results for the quarter ended September 2016 and prospects of the bank. PS Jayakumar, MD&CEO of the bank addressed the meet:

Highlights:

• Global business of the bank declined 10% yoy to Rs 921681 crore at end September 2016. Domestic business declined 7% to Rs 651264 crore, while overseas business dipped 17% to Rs 270416 crore at end September 2016. Global deposits fell 7% to Rs 567531 crore, while global advances declined 15% to Rs 354150 crore at end September 2016.
• The bank has continued the consolidation process with further reduction in low yielding asset and liabilities. Bank expects the process of consolidation to continue for some more time. Bank aspires to achieve loan growth of 12-15% in next 2-3 years.
• Bank has shade Rs 5500 crore of low yielding assets in international operations, while the internal asset book was recouped with additional lending of Rs 1000 crore.
• During Q2FY2017, the bank has posted highest level of operating profit in the last six quarters. Bank has targeted the operating profit of Rs 9500 crore for FY2017.
• The bank has improved provision coverage ratio to 62.95% at end September 2016, while proposes to improve it further to 65% by end March 2017.
• The bank has continued to improve margins to 2.29% in Q2FY2017. The domestic margin gained to 2.85%, while bank expects to be on track to touch 3% mark by end Q4FY2017. Overseas margins were stable at 0.98%, while bank expects it to improve to 1.1-1.2% by end Q4FY2017.

• Bank is reducing high cost bulk deposits. The high cost deposits stood at Rs 2700 crore at end September 2016, which are planned to be reduced in Q4FY2017. Domestic CASA ratio improved to 34.2% at end September 2016 from 33.8% at end June 2016, which is expected to rise to 35% by end March 2017.
• The fresh slippages of advances more than halved on sequential basis to Rs 2861 crore (Fresh Rs 2252 crore and rise in existing NPAs of Rs 609 crore). The NPA reduction though recoveries, upgradations and write-off were healthy at Rs 2903 crore in Q2FY2017.

• The SMA â€? 2 category loans of the bank has declined to Rs 12566 crore at end September 2016 from Rs 18116 crore at end June 2016.
• Outstanding domestic restructured advance (standard) book declined to Rs 12286 crore, while overseas restructured advances book eased to Rs 1574 at end of September 2016.
• Bank expects Gross NPA level of Rs 45000 crore to Rs 50000 crore by end March 2017. Bank expects overall fresh slippages of Rs 15000 crore, while expects recoveries of Rs 10000 crore in FY2016.

Demonetization

• Bank expects inflows of Rs 10 lakh crore of cash into the banking system due to the demonetization of Rs 500 and Rs 1000 currency notes.
• Bank is targeting collection of Rs 50000 crore of cash notes under demonetization scheme, higher than its market share of 4%
• In the first two days, the bank has collected Rs 11500 core, of which Rs 9500 crore was in the form of CASA deposit and balance was exchange of currency notes. Within CASA deposits, about Rs 7000 crore was into saving account deposits and Rs 2500 crore was into current account.
• The CASA deposit inflows add up to 7 percentages to the CASA ratio.

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