Analyst Meet / AGM - Analyst Meet

10-Nov-2017, 08:09
Bank of India conducted an analyst meet on 10 November 2017 to discuss the financial results for the quarter ended September 2017. Dinabandhu Mohapatra, MD&CEO of the bank addressed the meet:

Highlights:

• The bank has exhibited an all round improved performance in the quarter ended September 2017. The bank has improved profitability, margins, asset quality, provision coverage ratio for NPAs, and credit cost, while the bank expects to sustain the current improving momentum, going forward.

• The bank has substantially improved its provision coverage ratio to 65.2% in Q2FY2017 from 63.5% in Q1FY2018 and 55.2% in Q2FY2017.

• The interest income reversals on account of various restructuring schemes such as SDR and S4A amounted to Rs 201 crore in Q2FY2018 compared with Rs 196.61 crore for Q1FY2018.

• The bank has improved net interest margin to 2.15% in Q2FY2018 with positive shift in loan mix, while expects the further improvement in margins in H2FY2018.

• About 60% of the loans of the banks have shifted to MCLR based lending rate system end September 2017.

• The bank has witnessed higher cost-to-income ratio of 51.6% in Q2FY2018, mainly as cost-to-income ratio was lower for previous two quarter on account of one-off other income.

• The bank has reduced fresh slippages of loans to Rs 2141 crore in Q2FY2018 from Rs 4037 crore in Q1FY2018 and Rs 3963 crore in Q2FY2017.

• The bank has reduced gross NPA ratio to 12.6% end September 2017 from 13% end June 2017. Sector-wise, infrastructure sector contributed NPAs of Rs 5000 crore, power Rs 2000 crore, textiles Rs 2000 crore, iron & steel Rs 6000 crore end September 2017.

• The bank has showed marginal decline in its restructured loans to Rs 11819 crore end September 2017 from Rs 11679 crore end June 2017. The bank expects its asset quality to remain stable.

• The SMA -2 category loans of the banks stood at Rs 17000 crore at end September 2017.

• With regard to first list of accounts identified for resolution under IBC, the bank has exposure to 11 of 12 accounts at Rs 8700 crore, while the bank has made provision of 65% and some cases even upto 100%.

• With regard to second list, the bank has exposure to 17 account at Rs 3300 crore and bank has made provision of 50% on these accounts. The bank expects to benefit from the time bound resolution of these assets.

• The loan book of the bank remains flat end September 2017, while the bank is targeting loan growth of 7-8% for FY2018. Meanwhile, the timely allocation of capital under bank recapitalization plans would help the bank to target for higher loan growth.

• The bank has lined up various non-core asset for sale to shore up capital position. The bank has also started the process of QIP, while has requested to the government for capital infusion of Rs 2500 crore. The bank expects some sale of non-core assets in Q3 or Q4FY2017, depending on pricing.

• The bank is required to make additional provisions of Rs 573 crore on NCLT related exposure in FY2018, of which bank has provided Rs 191 crore in Q2FY2018 and balance would be provided in Q3 and Q4FY2018.

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