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Analyst Meet / AGM - Analyst Meet

Proposes to improve RoE to 15-18% in next three years

Bank of Baroda

06-Nov-2015, 07:29
Bank of Baroda conducted an analyst meet on 06 November 2015 to discuss the financial results for the quarter ended September 2015 and prospects of the bank. PS Jayakumar, MD&CEO of the bank addressed the meet:
Highlights:

Bank has maintained the CASA ratio, while continues to hold on to industry CASA position.

Bank has recorded healthy 11% growth in core fee income in Q2FY2016.

However, bank witnessed surge in fresh slippages of advances to Rs 6900 crore in Q2FY2016. About 20 corporate accounts contributed 70-75% of fresh slippages in Q2FY2016.

About Rs 1390 crore of fresh slippages were contributed by restructured advance book in Q2FY2016.

Segment wise, about 26% of the fresh slippages were contributed by the iron and steel segment, 15% by mining, 22% by infrastructure-power, 6% by textiles and 5% by electronics.

Bank has conducted fresh restructuring of advances of Rs 115 crore in Q2FY2016, which related to the domestic segment only.

Under 5:25 scheme, bank has conducted nil refinancing of advances in Q2FY2016, while there are few case under pipeline.

Bank has not conducted any sales of assets to Asset Reconstruction Companies (ARCs) in Q2FY2016. Bank intends to utilize various ways to recover NPAs than to sale them to ARCs.

SMA-II category accounts of the bank, where payments are 60 days over dues, stood at 4.5% of the overall advances at end September 2015.

The decline in yield and NIMs reflects the impact of higher slippages in Q2FY2016.

The share of international business stood at 31.7% of the overall business. Bank is planning calibrated reduction of low margin buyer's credit book in the international business.

Bank is focusing on improving RoE to 15-18% over next three years.

Bank has identified four key focus areas as follows

Maintain stable fresh NPAs and improve asset quality

Rebalance asset and liabilities portfolio and diversification

Build strong organization

Utilize digital and technology platform