BOI sets internal NPA target of Rs 4,500 cr for Mar

Public sector lender Bank of India (BOI) saw a 93% jump in Q4 net profit at Rs 953 crore on higher interest income and lower operating expenses.

Alok Kumar Mishra, CMD, Bank of India, in an interview with CNBC-TV18 said, "We have done very well in recoveries. The gross NPA has come down to 2.34% from 3.02% and the domestic NPA stands at Rs 5,170 crore."
For March 2013, BOI has set an internal target of Rs 4,500 crore with a gross NPA ratio of 1.6% and net over 1.1%, added Mishra. Below is the edited transcript of his interview with CNBC-TV18. Also watch the accompanying video. Q: If you could take us through the asset quality. Asset quality has seen an improvement this quarter however, there has been a slight increase in the restructuring account. Could you throw more light on that?
A: I would say that we have done very well in recoveries. The gross NPA has come down to 2.34% from 3.02%, as of September 2011 when we went for 100% NPA recognition through the system.
I would say that the domestic NPA at Rs 5,170 crore is lower than Rs 5,258 crore of June 2011, domestically. Indomestically, we are below June, from a ratio of 3.02% in September it has come down to 2.34%. In September the net was 1.98% and now it is 1.47%. So, the ratios have improved.
Moreover, post September 2011, the slippages have been less and recoveries have been more. In December the slippage was Rs 519 crore and recovery was Rs 62 crore. In March 2012, the slippages are just Rs 377 crore and recovery is Rs 898 crore. Q: Going forward, what is your outlook going to be especially on the NPA side. I believe you are targeting non performing assets to fall to around Rs 4,500 crore by March 2013?
A: For March 2013, we have internally targeted to be at Rs 4,500 crore with a gross NPA ratio of 1.6% and net over 1.1%. Q: Restructuring accounts continues to be a bit of stress or concern. It's around Rs 3900 crore in the fourth quarter. Is there any big pipeline that you are building up?
A: Not really. Most of it is already over and we have recognized it. One, two or three accounts would be for the system, nothing beyond that. Q: In this quarter did we see any large chunky accounts restructured?
A: Yes there were three or four of them but, they would have been with the system also. Q: Coming to margins, margins also have seen improvements this quarter. You have gone in for a cut in base rate. Do you think you would be able to maintain the margins at this level?
A: Yes, I think we will be maintaining our NIMs at this current level. Domestic NIM has moved to 3.29% and international to 1.51%. I think at 2.86%, what we have shown I think we will be able to do it for this quarter. Q: With regards to credit and deposit growth what's your general outlook because there is definitely a decline or sort of growing decline in the credit and deposit growth. Are you confident of maintaining that 20% credit growth target or 18% credit growth target for next year?
A: About 16-17% of deposit growth and about 18% of credit growth is what we have seen.
It should be seen in the background of the 510 branches that we have opened last year and the verticalisation that we have done. We have regrouped our businesses and all the processing centers – 52 processing centers for agriculture, 21 for retail, 22 for SMEs along with the 100 SME branches, have swung into action to give out credit.
Hence, we feel it will be possible to maintain the credit growth target. Q: Both, on the deposit side as well?
A: Absolutely, deposit and advances side.
We have added 9 million customers this year and we have a total of 54 million customers. We have also added 510 branches this year, taking it to a total of 4000.
All of them will be focus centers for the deposit growth and advances. The 5%, the 5.03% growth in CASA itself is recognition of the reward of the huge number of accounts that we opened.