Aiming for sub 3% non performing loans in FY16: SBT

State Bank of Travancore’s gross non-performing loans (NPLs) exceeded four percent level in the June quarter. However, the management is confident of reining in NPLs in the coming quarters, Jeevandas Narayan, managing director of State Bank of Travancore told CNBC-TV18.The company’s gross NPLs grew 17 percent to Rs 2,759 crore in the June quarter. Slippages for the first quarter were Rs 1,000 crore. Narayan said there were Rs 500 crore of loans being upgraded, mostly in the retail sector, as borrowers resumed interest payment. He said the bank had no major slippages in corporate segment. In the coming quarters, SBT is targeting to restrict its NPLs to under three percent. Around Rs 173 crore of loans were restructured in the June quarter and approximately four accounts worth Rs 1,400 crore were re-financed, he said. Narayan said the bank's net interest margins (NIMs) touched an all time high of 2.67 percent in the quarter gone by. Below is the transcript of Jeevandas Narayan’s interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.Latha: 66 basis points rise in the gross non-performing loans (NPLs). How much did your slippages rise?A: We have started off with the non-performing assets (NPAs). The first glance looks a bit under weighing if you go a little bit deeper it is not cause for undue concern. Even though there have been slippages during the quarter, we tried the hard way in this quarter through recovery and up-gradations. You don’t go for write-offs and all that. In respect of assignments, nothing major has happened. If you compare it with the first quarter of last year, it is almost only just about two third of the slippages. Latha: How much is the slippages number?A: It is around Rs 1,000 crore, but then up-gradations have been to the extent of around Rs 500 plus so around 50 percent of that. More importantly, it has happened in the retail segment. In corporate, more or less we think we have seen the end of the slippages so to say except for some surprises which could come in. We are not ruling that out, but then retail one good thing also is that these are to a large extent effort-elastic. I think in this quarter with a bit of heightened activity monitoring should be able to get a handle on the NPLs.Latha: You are saying that slippages for subsequent quarters are going to be less than Rs 1,000 crore?A: It should be and that has been the trend in the couple of years. First quarter, because of various other factors may be the bandwidth available for monitoring this would not have been the most ideal. Sonia: What about the fresh restructuring? What is the exact amount this quarter and how does it compare to the previous quarters?A: First let me talk about this quarter. This quarter it is around Rs 179 crore is the fresh restructuring. In fact, that is just about 25 percent of the previous quarters restructuring. Even in the state of restructuring, there has been a tapering which has been felt at the ground level. Latha: Refinancing 5:25?A: We have done refinancing in about couple of accounts, 4 accounts or so, and little over Rs 1,400 crore.