Cleaned up balance sheet well ahead of RBI deadline: Vijaya Bank

Vijaya Bank has cleaned up its balance sheet in the fourth quarter of FY16, ahead of the Reserve Bank of India's (RBI's) guideline of March 2017, said Kishore Sansi, MD & CEO of the bank, in an interview with CNBC-TV18 post its fourth quarter results announcing on Thursday.

The bank reported net profit of Rs 71.3 crore in Q4 compared to Rs 96.8 crore in the same quarter last year. The gross non-performing asset (GNPA) was at 6.64 percent, while net NPA was at 4.81 percent.

Sansi said the bank’s restructured book had come down significantly to Rs 2,270 crore in FY16 from 5,370 crore in FY15.

The bank currently has five accounts under strategic debt restructuring (SDR) totaling Rs 400 crore, he said, adding, provisions are already being made for these accounts as a prudent measure.Below is the verbatim transcript of Kishore Sansi's interview with Surabhi Upadhyay and Nigel D'Souza on CNBC-TV18.Nigel: Asset quality appears to be a bit of a worry for the street. Could you give us some numbers? What exactly was the slippage for this quarter and could you also tell us with the number that you are provided. How much of asset quality review (AQR) is already paid out. Has the entire thing paid out? A: The entire AQR has been paid off. We had an AQR provision of about Rs 500 crore but down that we have made extra provision for the stressed assets amounting to about Rs 2,000 crore. However, the Reserve Bank of India has given a guideline to clean balance sheet by March'17. Therefore, the board has taken a view that we will clean our balance sheet right on March'16 and that's how we have seen the extra slippages and extra provisions to be made and that is why we have seen little decline in the net profit and increase in the impaired assets.Surabhi: Could you give us some more details on what is the total restructured book as of now and what has been the slippage number for Q4?A: Total restructured as of now is Rs 2,270 crore which is down from Rs 5,370 crore as on March'15.Surabhi: Could you give me the comparison over Q3 as well, so we get a sequential trend?A: Sequential, it was not much because most of the stressed assets have moved to equity bonds from state DISCOMs - that's why most of the transformation has happed during Q4.Nigel: Could you also fill us in with what exactly was the net interest margins (NIMs) for the past quarter?A: The net interest margin has improved to 2.27 percent. The net interest income has increased by 20 percent and non-interest income has shown an increase of 26 percent. Therefore, all things put together have resulted in an improvement in operating profit which has shown a growth of 23 percent year-on-year which stands at Rs 1,549 crore.Surabhi: You mentioned a lot of conversion to equity. Can you give us any update, were there any strategic debt restructuring (SDR) accounts and what is your pipeline, if you have any more accounts in SDR or in 5:25?A: It was on the Distribution Company (DISCOM) conversion of debt into bonds.Surabhi: Do you have anything either in 5:25 or in SDR as well?A: In SDR we have about five accounts totalling to about Rs 400 crore.Surabhi: How do they look to you? What are the chances of resolution here?A: We have already started making provisions for those accounts not withstanding to what happens in the future but we have started putting some provisions for these accounts too.