Analyst Meet / AGM - Analyst Meet

30-Oct-2013, 06:13
Syndicate Bank conducted the analyst meet on 29 October 2013 to discuss the financial performance of bank for the quarter ended September 2013 and the prospects of the bank. SK Jain, CMD and along with other colleagues addressed the meet:

Highlights:

• The absence of income tax refund in Q2FY2014 impacted the growth of interest income.

• The pension liability related provision and branch expansion mainly caused the increase in expense ratio in the quarter ended September 2013.

• Bank is focusing on CASA deposits and has launched the CASA campaign, which is expected to help improve CASA ratio from current 32.4% at end September 2013. CASA ratio is also expected to strongly benefit from launches of E-lounges.

• With the tight liquidity condition in the quarter ended September 2013, bank's bulk deposits share increased to 18.9% at end September 2013 from 15.8% at end June 2013. Bank expects to reduce bulk deposits to below 15% of total deposits by end December 2013.

• The business figures of North Malabar Grameen Bank were shifted to a Kerala State based Bank during the quarter ended September 2013, which caused the decline in agriculture lending book of the bank along with the fall in PSL lending to 38% of the total advances. Bank expects to improve the PSL lending to above 40% of total advances by end March 2014 with strong strength of agricultural branches.

• Business growth of the bank was mainly driven by overseas branch-London. Bank expects the domestic advances growth to pick up in the second half of FY2014 with mid-corporate, SME and retail book to be major contributor.

• In order to ensure quick Turn Around Time for credit and also to ensure top executive being close to customers and branches, bank has introduced the concept of Field General Manager announcing to open 8 FGM offices on 01 November 2013. These offices will be headed by General Managers to ensure quicker decisions and to take care of development and recovery activities of the regions coming to under their control.

• Bank has also proposed to enlarge existing centralized processing cells for housing loans and similar cells will be opened for SME credit.

• Restructured advance book of the bank is steady for last two years. Bank does not have a significant restructuring pipeline, while expect the restructuring run-rate of around Rs 250 crore per quarter. On the State Electricity Boards restructuring front, bank is expecting to receive about SEB bonds of Rs 700-800 crore in Q3FY2014.

• Bank has written-back provision for restructured account in the quarter ended September 2013 with strong recoveries of Rs 400 crore.

• The fresh slippages of advances surged to Rs 1741 crore in the quarter ended September 2013, while about five accounts contributed about Rs 1200 crore of fresh slippages from shipping, diamonds, real estate and textiles sector.

• Overseas GNPA stood at Rs 302 crore and NNPA stood at Rs 223 crore at end September 2013.

• Bank expect the asset quality under control, and predicts that the overall fresh slippages for FY2014 would be around Rs 3200 crore compared to Rs 2142 crore in FY2013.

• Bank expects the cost of deposit to come down in H2FY2014 with better liability management and decline in cost of bulk deposits.

• Bank expects the NIM to improve above 3.0% by end FY2014. The overseas NIM is expected to improve to 0.5-.06% from current level of 0.3% in Q2FY2014. Deployment of excess liquidity is expected to improve overseas NIM.

• Bank has received communication from Government of India for capital infusion of Rs 200 crore, while it also been communicated to consider QIP to raise capital. Board of the bank has approved the QIP of Rs 1500 crore, while bank will soon take call on appropriate time of QIP with the size of Rs 700-800 crore.

• Bank has opened 88 branches on 88^th Foundation Day taking total branch network to 3135 branches as on date from 3047 branches at end September 2013. Bank proposes to reach a branch network of 3235 branches by end March 2014, indicating to open another 100 branches in H2 of FY2014.

• Bank has 1363 ATMs at present and proposes to ensure that every branch has one ATM.

Powered by Capital Market - Live News