See stress in steel, power, textile sectors: Bank of India

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State-run Bank of India reported better than expectations third quarter numbers. Its net interest income (NII) jumped 4% y-o-y to Rs 2,067 crore and profit rose nearly 10% year-on-year to Rs 716 crore on the back of lower provisioning due to improved asset quality.

In an interview to CNBC-TV18, Alok Kumar Mishra, chairman and managing director, Bank of India said, the bank's NIMs have moved to 2.5% and will be about 2.6%. in the next quarter.

The bank is targeting credit growth of 15.5-16% for FY12. He further said that stress is evident in the loans given to textile, power, steel sectors and SMEs .

Below is the edited transcript of Mishra's Interview with CNBC-TV18. Also watch the accompanying video.

Q: How have you been able to improve the gross NPAs and slippages in this quarter as compared to the last quarter?

A: We have been making hard efforts for recovery, for recognizing because in the last quarter we did 100% on the core banking platform and brought everything to the custom system recognition. The entire branch network responded to it and there was a good recovery this time. The slippage was lower at about 519 crore and recovery was 662 crore and we have recognized everything. So, this culture is certain now.

Q: Considering that you had a large exposure to Kingfisher which has been recognized as an NPA this quarter despite that fact slippages are quiet low this quarter?

A: Recovery is almost over Rs 1600 crores. So, naturally it was taken into account. Had this not been there recovery would have been much more.

Q: What about restructured accounts. How much were your restructured accounts this quarter? What is the pipeline of the restructured accounts looking like for the next quarter?

A: For the current quarter the restructure was Rs 2,233 crore, the total restructure in the domestic book is about Rs 11,479 crore. I can't say about the pipeline, but if some accounts require general restructuring, they will be done.

Q: Where have these come from, which all sectors have you restructured this quarter?

A: Textile and steel.

Q: Would you be looking at this level of restructured accounts in the next quarter as well or will you be able to possibly report a lower level of restructured accounts?

A: This restructuring was quite high. Going forward it may not be so much.

Q: You have been able to report a higher margin this quarter. Will you be able to maintain this kind of margins in the next quarter as well?

A: Surely. NIM has moved to 2.55%. Next quarter, we will think that will be about 2.6% domestic and international will improve further. Domestic will see about 3% and international will be about 1.4%.

Q: Much of your growth this quarter has come from the overseas business that is largely due to the rupee appreciation. Do you think that in the next quarter the domestic book will be able to see slightly better kind of growth as compared to overseas?

A: If you remove the depreciation part of it, the book internationally has grown about 15%. If you take the depreciation it is much bigger. But I see more business coming in this quarter from the domestic book.

Q: What is the kind of credit growth target that you are looking at for the whole FY12?

A: It will be about 15.5-16% in line with the RBI guidelines.

Q: In the coming quarters what is the kind of pressure you are seeing in the NPA's. Any sectors that you feel will go through some stress?

A:  Sector that we are seeing is steel, power, textile and some SME, but at least we are in a better position because we have recognized everything which was on the book till September. This has responded well because recoveries have been more than the slippages. Now here onwards, if it is any large exposure which is affecting all the banks it will be there, but otherwise we do not have anything that we are upset about.