No more accounts in pipeline for restructuring: Dena Bank

Chairperson and MD of Dena Bank Nupur Mitra tells CNBC-TV18 that they have no more accounts in the pipeline for restructuring. “We did have good exposure on DISCOMs, and that has been the major restructuring issue for us, but fortunately with this quarter everything is over,” she said in an exclusive interview.

Dena bank had significant exposure to DISCOMs and the power sector, but they completed the final bit of restructuring the past quarter. “Not only have we completed that restructuring of around Rs 800 crore, but we have also done the NPV provisioning at the beginning of the year so that our profitability going along does not get affected,” said Mitra. Dena Bank reported a 42% year on year growth in net profit in the first quarter of FY13, however, their gross non-performing assets increased compared to last quarter. “The gross NPAs have increased a little bit because of the general economic scenario, but I am very confident that the asset quality is not going to deteriorate further,” said Mitra. Below is an edited transcript of her interview with Sonia Shenoy. Q: What was the net interest margins (NIM) that Dena Bank has reported this time around and what could be a sustainable margin for FY13? A: First I will give you the major figures. The operating profit has gone up by 48.80% and the net profit has gone up by 41.97%. The net interest income has increased by 37.10% and the net interest margin is up by 16 basis points to 3.06%. The gross non-performing asset ratio has come down from 1.86% to 1.80%, and net NPA ratio has come down from 1.08-1.01%. The business mix is up by 31.33% and CASA is at 30.91%. I would like to say that even if you take back the one-time income tax return which we got last year, we have shown improvement sequentially in the profit by around 48%. Q: Your gross NPA number has actually deteriorated compared to last quarter? A: In absolute terms the gross NPAs have increased a little bit because of the general economic scenario. I am very confident that the asset quality is not going to deteriorate further. Q: What do you think your NIMs would hold at by the time the year closes up? A: I am looking at a NIM of around 3% and I am very confident of meeting that. Asset quality is not a big concern so far as Dena Bank is concerned so we should be able to maintain NIM at 3%. _PAGEBREAK_ Q: What have the fresh slippages been in this particular quarter and what could it look like going ahead in the next couple of quarters? A: If you talk in absolute terms, there has been a slippage of around Rs 100 crore, and it has been in small accounts. I am pretty confident that going forward we will be able to curb the growth of NPA. In terms of gross NPA, sequentially it has gone from Rs 956 crore to Rs 1,076 crore. So it is around Rs 110 crore growth because of lesser growth in credit. But net NPA sequentially also has remained at 1.01% only; it has come down from June quarter last year from 1.08% to 1.01%. Our provision coverage ratio also we have maintained; last quarter it was 75.53% and it is 75.62% now. Q: In infrastructure and the power sector, what are the fresh restructured assets you have? A: We do have good exposure on DISCOMs, and that has been the major restructuring issue for us. Fortunately, with this quarter everything is over. While disclosing the results last quarter I had said that we have done around Rs 1,300 crore and balance we were to do this quarter. We have completed that. Not only have we completed that restructuring of around Rs 800 crore, but we have also done the NPV provisioning at the beginning of the year so that our profitability going along does not get affected. Q: Where does the outstanding restructured book of the bank stand at currently? A: At around Rs 3000 crore now and our major restructurings are over now. Q: So there are no more accounts in the pipeline for restructuring? A: No, all DISCOMs and power sector restructuring which was required has been done. Q: What about the loan growth and deposit growth, what do you think you can manage for the current year? A: We are looking at around 18% in deposit and around 20% in loan.