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Analyst Meet / AGM - Analyst Meet

Expects to maintain NPA at current level of Rs 2219 crore in FY2014

State Bank of Bikaner and Jaipur

24-Jul-2013, 02:53
State Bank of Bikaner and Jaipur conducted an analyst meet on 23 July to discuss the financial results for quarter ended June 2013 and prospects of the bank. B Sriram, Managing Director of the bank addressed the call:
Highlights:

Bank recorded 12% increase in the net profit, mainly driven by seven-fold increase in treasury income, while the decline in NPA provisions also supported the growth in the bottomline.
Percentage Net NPA declined 04 bps YoY to 2.27% at end June 2013. Bank holds the floating provisions of Rs 61 crore.
Provision coverage ratio of the bank has improved to 60.7% at end June 2013 from 58.6% a quarter ago and 57.2% a year ago.
The fresh slippages of advances to NPA category stood at Rs 377 crore, while the recoveries and upgradations were at Rs 278 crore in the quarter ended June 2013
Bank expects the recovery of Rs 50 crore in Q2FY2014 out of Rs 377 crore slipped in the Q1FY2014 and another Rs 50 crore in H2FY2014.
Bank has the restructuring pipeline of Rs 500 crore, which also include Rs 300 crore already classified as NPA. Meanwhile, bank also has NPAs worth Rs 300 crore that can be written-off.
Thus, bank expects to control the GNPA at current level of Rs 2219 crore during FY2014.
Bank has done fresh restructuring of Rs 355 crore in the quarter ended June 2013. The standard restructured advances stood at Rs 3696.3 crore at end June 2013 compared to Rs 3770.83 crore at end March 2013.
Deposits of the bank rose at moderate pace of 4% YoY to Rs 66743 crore at end June 2013, showing sharp deceleration in growth from 17% at end March 2013. The moderation in deposits growth was caused by sharp decline in CD and bulk deposits to 7.66% of the total deposits at end June 2013 from 14.5% at end March 2013.
However, the CASA deposits increased 14% gaining the share to 39.6% at end June 2013 from 36.3% at end March 2013.
Bank is adding 6500 saving accounts per day with the total saving accounts customer base at 1.13 crore at end June 2013.
As against moderation in deposits growth, the advances of the bank increased at slightly lower pace of 13% at end June 2013 compared to 17% growth at end March 2013. Bank expects the credit growth of 13-15% for FY2014.
Bank has witnessed decline in the cost of deposits to 7.06% in the quarter ended June 2013 from 7.13% in the quarter ended March 2013. Bank expects the cost of deposit to remain steady at current level.
The Net Interest Margin (NIM) of the bank improved to 3.50% in the quarter ended June 2013 from 3.14% in the previous quarter, but declined from 3.90% in the corresponding quarter last year.
Bank expects to maintain the NIM at current level of 3.50% in FY2014.
The proportion of online application with the bank for home loans has increased to 50% of overall applications. Bank provides the benefit of 10 bps lower interest rate to the customers for online applications.
Bank has recorded increase in expense ratio in the quarter ended June 2013 with provision for wage hike, pension and gratuity. Addition of new staff also weighed up on the expense ratio.
Bank expects to maintain the expense ratio at 48% in FY2014.
As per the bank, it would require the additional Tier I capital of Rs 500 crore under Basel III.
Bank has added new 09 branches and 53 ATMs in the quarter ended June 2013 taking the count to 1046 branches and 1140 ATMs at end June 2013.
Bank has the employee strength of 13623 employees at end June 2013 up from 12866 employees at end March 2012.
Bank proposes to add 65-70 branches in FY2014, while it is planning recruitment in Q4FY2014.
Bank intends to raise the clerks: officer's ratio to 1.3:1, which currently stands at 1:1, which would help bank to improve the expense ratio.
The home state of Rajasthan contributes 69.2% of the total deposits and 50.4% of advance of the bank. Rajasthan also has share of 82.5% in the total branch network of the bank at end June 2013.
Meanwhile, bank has the share of 24.6% in deposits, 16.2% in advances and 15.0% in branches within the Rajasthan state.