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Analyst Meet / AGM - Analyst Meet

Proposes to reduce NNPA to 1.5% by end December 2015, embarks on vision 2020

Vijaya Bank

14-May-2015, 12:44
Vijay Bank conducted an analyst meet on 13 May 2015 to discuss financial performance for the quarter ended March 2015 and the prospects of the bank. Kishore Sansi - Managing Director and CEO of the bank addressed the call:
Highlights:

Bank has one of the best asset quality among public sector banks. GNPA ratio of the bank stood at 2.78%, while NNPA ratio stood at 1.92% at end March 2015.
Bank has improved CASA ratio to 20.35% at end March 2015 from 18.39% at end March 2014.
Bank has shaded high cost deposits by 40% in FY2015, while completed repricing of about Rs 27000 crore of deposits. Bank plans to further reduce leverage on high cost business.
NNPA and restructured advances together stood at 8.9% of advances at end March 2015, while excluding the state electricity boards related restructured advances, which are guaranteed by the state government, the figure was lower at 6.5%.
Bank has prepared the vision plan for 2020 on a conservative basis, and so it is highly confident of surpassing the targets ahead of 2020.

Vijaya Bank - Vision 2020
	FY15	Target FY16	Vision FY20
ROA	0.33	0.53	1.00
ROE	7.60	10.30	15.00
NIM	1.93	2.25	3.25
Expense ratio	60.30	54.00	45.00
Net NPA	1.92	1.50	1.00
CD Ratio	69.41	75.00	76.00

In FY2016 itself, the bank plans to achieve 50% of vision 2020 targets.
Bank plans to reduce NNPA ratio to 1.5% by end December 2015.
Bank expects quantum recoveries and upgradations in Q1FY2016, so expects the improvement in GNPA in absolute as well as percentage terms.
Bank sees the worst is over in terms of asset quality.
Bank does not have any securities receipts outstanding against assets sale to Asset Reconstruction Companies (ARCs).
Bank proposes to improve the credit-deposit ratio to 70% by end December 2015.
Bank has recorded healthy improvement in NIMs to 2.02% in Q4FY2015 from 1.88% in Q3FY2015. Bank proposes maintain such speed of NIM improvement quarter-over-quarter, to post higher NIM of 2.25% for FY2016.
Bank has capital raising plans of Rs 1500 crore through various routes in FY2016. Bank proposes to improve the Capital Adequacy Ratio to 12% by end March 2016.
Bank has targeted the advances growth of 18-20% for FY2016. The bank is focusing on retail, MSME, mid-corporate sectors to boost credit growth. Bank is targeting 25% growth in the retail and housing loan books for FY2016.
As per the bank about 5.5 crore SMEs are looking for credit, providing opportunities to the bank to boost SME loan book. Bank has special plans for SME sector, which would be launched very soon.
As per the bank, its loan proposal clearance rate stands at 55%, as it select only quality proposals.
Bank do not plans any infrastructure lending for next two quarters.
Bank would aggressively focus on branch expansion, while planning to add branches at district head quarters with no self-presence.
Bank has about 45 branches in the northeastern region with the CASA ratio at 46%.
Bank is likely to soon take a call on base rate reduction.
Bank is youngest among public sector banks, with the average age of the staff at 39 years. Bank sees the average age of the staff to continue declining with fresh recruitments.