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Analyst Meet / AGM - Analyst Meet

Propose to reduce GNPA below 3% by end March 2015

Dena Bank

19-May-2014, 12:42
Dena Bank conducted the analyst meet to discuss financial performance for the quarter ended March 2014 and the prospects of the bank. Ashwani Kumar, CMD addressed the meet:
Highlights:

Bank sold about Rs 543 crore of bad loans to Asset Reconstruction Companies (ARCs) during Q4FY2014, helping to reduce the GNPA. Bank is also planning to sale more bad loans to ARCs in FY2015.
Bank cinctured restructuring of advances worth Rs 410 crore in Q4FY2014. The outstanding restructured advance book of the bank stood at Rs 7637 crore at end March 2014 from Rs 5423 crore at end March 2014. About Rs 2861 crore or 36.5% of restructured advances book of Rs 7637 crore is backed by government guarantees.
Fresh restructuring of advances was higher at RS 2436 crore in FY2014 compared to Rs 1875 crore in FY2013.
About Rs 781 crore of restructured advance have slipped to NPA category. The slippages rate in the restructured advance book stands relatively lower at 8%.
Bank has the restructuring pipeline of Rs 300-400 crore for Q1FY2015. However, the bank expects improving asset quality trends with incremental fresh slippages likely to ease going forward. Bank does not any big account likely to slip into NPA category.
Bank proposes to reduce the GNPA ratio below 3% by end March 2015
The size of SMA-2 stands Rs 4200 crore at end March 2014 (including non-fund based exposure).
Bank is planning to issue equities to employees or conduct right issue to improve capital position.
Bank expects the heavy provisions on MTM investment depreciation and bad loans to be absent in FY2015 supporting the bottomlines.
Bank is targeting the business growth of 20% for FY2014.
NIM of the bank eased to 2.52% in FY2014 from 2.80% in FY2013, mainly on account of interest income reversals with fresh slippages of advances. The interest income reversals stood at Rs 75 crore in FY2014 and Rs 32 crore in Q4FY2014.
Bank proposes to improve the NIM to 2.60-2.65% in FY2015.
Bank has improved the Priority Sector Lending (PSL) ratio to 35.22% at end March 2014 from 33.18% at end March 2013, while bank proposes to further improve PSL ratio to around 37% by end March 2015.
The operating expenses of the bank surged 27% in FY2014, as bank added about 169 new branches and recruited fresh 1890 staff in FY2014. Bank has also made required provisions for employee benefit.
The provision for wage revision jumped from Rs 40 crore (5 months) in FY2013 to Rs 96 crore in (12 months) FY2014. Bank has assumed the wage hike rate of 15%.
Bank expects the operating expense to increase 15% in FY2015.
Bank proposes to open new 150-200 branches in FY2015. Bank also intends to recruit about 1637 staff in FY2015.