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Analyst Meet / AGM - Analyst Meet

Targets advances growth of 18-20%, proposes to improve domestic NIM to 3% in FY2015

Bank of India

19-May-2014, 12:38
Bank of India conducted the analyst meet on 15 May 2014 to discuss the financial performance of bank for the quarter ended March 2014 and the prospects of the bank. Vijayalakshmi R Iyer- CMD addressed the meet:
Highlights:

Bank has improved the market deposit as well as advances share by 21 bps and 34 bps, respectively in FY2014, while proposes to further improve its market share in FY2015.
The theme for the year FY2015 is Poised for higher growth.
Bank has targeted the advances growth 18-20% for FY2015, while proposes to improve the domestic NIM to 3% and international NIM to 1.3% in FY2015.
Bank intends to scale up the non-interest income growth to 20% in FY015 from 14% in FY2014. The cash management services of the bank have show sharp pick up, expects further momentum during FY2015.
As per the bank, the year FY2015 would be year of retail and SME lending. Bank has targeted the retail lending growth of 45% in FY2015, while expects to double the retail book in two years. Bank also plans to add 36 retail business centers in FY2015.
Bank proposes to improve the domestic CD ratio to 75% by end March 2015 from 72% at end March 2014.
On asset quality front, bank plans to reduce GNPA below 3% to at least 2.75%, while cut NNPA to 1.75% in FY2015.
Bank proposes to accelerate the CASA deposits growth to 20% by end March 2015 from 12% at end March 2014. Bank has also initiated banking services at doorstep all over India, which would support the current account deposit growth.
Customer base of the bank has increased by 12 million in FY2014.
Bank would add about 500 new branches, while also proposes to install new 4000 ATMs in FY2015.
Bank has the restructuring pipeline of Rs 1100 crore for Q1FY2015.
As per the bank, the surge in fresh slippages of advances was mostly on account of technical reasons. However, bank expects to upgrade about 50% of theses fresh slippages in Q1FY2015, while about 25% already stands upgraded.
Bank proposes to improve the provision coverage ratio to 62-63% by end March 2015.
Bank sold Rs 2314 crore of bad loans to Asset Reconstruction Companies (ARCs) for valuation of Rs 2628 crore in Q4FY2014.
Advances of the bank in SMA-2 category stands at below 5% of the overall advance book.
Bank has headroom to issue about Rs 2400 crore of Tier-II bonds (overseas or domestic), while it also monetizing foreign investment and domestic real estate to improve the capital base. Bank is expecting the proceeds of about Rs 3000 crore from monetization of assets. As per the bank, if the plan fructifies the capital position of the bank would improve by 250-300 bps.
Bank is also focusing on capital efficiency and optimality with prudent credit selection to support the CRAR ratio.
Bank expects the tax rate at 23-26% for FY2015.