Aim to achieve 17% growth in loans for FY13: Vijaya Bank

Vijaya Bank announced its results for the first quarter of 2012-13 on Wednesday. HS Upendra Kamath, CMD, Vijaya Bank, explains to CNBC-TV18 the various aspects of the bank's performance during the quarter.

Below is an edited transcript of the interview on CNBC-TV18.  Q: What are your net interest margins (NIMs) for this quarter?
A: The NIM reported for Q1 of FY12-13 is 2.15% Q: And as compared to 2.8% on a quarter-on quarter (QoQ) basis?
A: In March 2012, the NIM was 2.47% and during the current financial year of 2012-13, we hope to maintain the NIM at the same level. Q: What about asset quality? What kind of improvement do you hope to see in the quarters to come because this time you have reported 2.85%?
A: The asset quality looks like this- our gross NPA as of June 30, 2012 has come down to Rs 1,693 crore from a level of Rs 1,718 crore as of March 2012. In percentage terms, it has come down from 2.93% to 2.85%. Similarly, the net NPA has also come down from Rs 998 crore to Rs 978 crore. In percentage terms, it has come down from 1.72% to 1.67%.
Going forward, we are hopeful that we will be in a position to contain the level of the non-performing assets within last year’s limit. There may not be any substantial growth, but I do acknowledge that there would be cases of restructuring under CDR as well as outside CDR, including the discom (electricity distribution companies) accounts. Q: What is the fresh restructuring conducted in this quarter and where has the pressure come in from, with respect to individual sectors?
A: During the current quarter, the total restructuring that the bank has is of the order of Rs 827 crore and this includes among others, the accounts of discoms and the infrastructure sector.
_PAGEBREAK_ Q: What kind of movement do you expect to see in provisions? The net profits, this time around, have gone up because of lower provisions this quarter. How much more do you think could it be improved in the next couple of quarters?
A: There will be a tight leash on slippages. But the area where we may not have much control is the restructuring of discoms and the infrastructure sector that is likely to happen via or outside CDR.
Two more discoms are likely to be restructured during the current quarter and in Q2. There are also some accounts where flash reports have been filed with the CDR.
There will be some amount of additional provisioning that will be required for these accounts on a NPV basis. But we are hopeful that we should be able to take care of these things - out of our normal revenue flows and by shedding some of the high-cost deposits. Our interest expenses would also come down and therefore overall profitability would improve. Q: What kind of gross NPA target do you think Vijaya Bank can achieve by the end of FY13?
A: In March 2012, we were at around 2.9%. There may not be any drastic or dramatic reduction in our gross NPA levels, but with an efficient recovery and monitoring mechanism, we are hopeful to contain gross NPA at similar levels. It should also be acknowledged that currently there is some stress on the quality of credit portfolio. Q: What about growth in loans then? What is the loan growth target that Vijaya Bank has for FY13?
A: Our guidance for 2012-2013, among others, includes a loan growth of about 16-17%. In 2011, loans grew almost 20%. We have moderated loan-growth levels this year.