Back

Analyst Meet / AGM - Analyst Meet

Expects advances growth at 15-16% and NIM to be maintained steady in FY2015

State Bank of India

27-May-2014, 02:22
State Bank of India conducted an analyst meet on 23 May 2014 to discuss the financial performance for the quarter ended March 2014and prospects of the bank. Arundhati Bhattacharya, Chairman of the bank addressed the meet:
Highlights:

Bank has made many qualitative changes in the banks functioning. The focus areas for the bank were risk management, NPA control, productivity improvement and cost control.
On risk management front, bank has been providing special training to all the credit committees sanctioning loans. Early review of all sanctions is conducted to check that the quality is not compromised.
On NPA control front, the committees formed to monitor the accounts showing stress conducted about 1099 meetings in Q4FY2014, while status of about 4600 accounts was reviewed.
Bank has formed special committees to look at the restructuring of Special Mentioned Accounts (SMA).
Bank has mapped about 69000 villages to branches to have better control on NPAs in the agriculture segment.
On productivity improvement front, bank plans to roll out performance dashboard and incentives by July 2014. Bank has also made compulsory e learning for all staff.
On cost control front, bank expects the impact of measures takes so far to pay dividends in FY2015, while also expects the impact of qualitative changes made in the bank to be visible soon.
Bank proposes to contain the growth in overheads (other operating expenses) at 10% in FY2015 compared to about 22% in FY2014. Bank has fully provided for revised pension assumptions and wage revision in FY2014.
Bank continues to maintain the healthy market share, despite being cautious on the lending front.
Bank has maintained the NIM steady in FY2014, while consistently improving yield on advances on qoq basis.
With the capital market opportunities opening up leading to corporate credit demand deleveraging and working capital cycle shortening, bank expects the asset quality stress to ease.
Bank has the restructuring pipeline of Rs 3700 core for Q1FY2014.
Bank sold assets amounting to Rs 3590 crore to Asset Reconstruction Companies (ARC) in Q4FY2014, of which about Rs 1700 crore recorded in the recovery and balance Rs 1890 as write off.
Bank expects the advances growth of 15-16% in FY2015, while hopes growth can be higher with the higher improvement in the economic growth.
Bank expects to maintain the NIMs steady in FY2015.
As per the bank, the capital base of the bank is sufficient for the advances growth of 15% in FY2015.