In an interview to CNBC-TV18's Latha Venkatesh and Surabhi Upadhyay, Dinabandhu Mohapatra, MD and CEO of Bank of India spoke about the numbers of his companies and the outlook going ahead.
Below is the verbatim transcript of the interview.
Surabhi: If you could start by telling us some more internals on the asset quality and whether this signals that the worst of the pain is behind which means that whether we will see lower slippages going ahead as well?
A: Yes, we are expecting better asset quality going ahead and whatever initiatives we have taken, that is paying off. And we are hopeful that unless some surprises coming from external areas, we will definitely be posting better results going ahead.
Latha: Your slipages are actually the best part that the market appears to like. From some Rs 7,000 crore in a quarter, you have come down to Rs 4,000 crore. Will this be the situation quarter-on-quarter that we will see it a little lower in the second, third and fourth?
A: It will be improving every quarter.
Latha: Any exposure to the 12 companies that are in front of the bankruptcy court?
A: Yes, around 10 accounts we have out of that 12 accounts.
Latha: And they are provided for entirely? I mean you have to provide 50 percent this year?
A: We have not only provided 50 percent. In some of the big accounts, we have already provided 100 percent also.
Latha: Loan growth of course, has been a point where the bank has not concentrated. Can we see a turnaround?
A: No, we have concentrated there also, but we have concentrated on asset composition. Within the topline, the asset composition has been focused and that has yielded results and going forward, it will be more good news from that aspect also.
Latha: So, should we expect high single digits loan growth?
A: No, for example, we have huge exposure in international is there. So there we have little bit pressure on net interest margins (NIM). We can shift to domestic front with less MCLR requirement. So within that topline also, we can earn more profit.
Latha: Will there be any capital requirement?
A: Capital we are very comfortable. You have seen, without raising any capital we have improved our common equity tier I (CET1) and then capital total from 12.17 to 12.28. So, it is a good improvement if you see both, CET1 and capital as a whole. So we are very comfortable. And going forward, we have also lined up some sale of non-core assets and other means of raising capital. And depending upon the market conditions and requirements too, can go, but as on today, very comfortable.
Latha: I wanted to check out if you will also be cutting your savings deposit?
A: That we are examining. Asset-liability committee (ALCO) will take a call. We will examine, both asset and liability side, both we will take a call.
Latha: When is ALCO meeting? When should we expect something?
A: Next week we will be having a close examination and then come out.
Latha: Any conversation at all with the government on consolidaton? We keep hearing that the government is going to announce something.
A: That is part of the government. From our side, as I said earlier also, as I said, we are focusing on all the aspects of our own banks, the strength of Bank of India, so that we will be in better positions and other partners will be attracted to Bank of India depending on our own strength.
Latha: A final word on recoveries. Your pace of recoveries used to be very strong. It is still not bad at Rs 1,400 crore in one quarter. Any guidance on recoveries?
A: Recovery will definitely be better, quarter-on-quarter and apart from that, recovery is one aspect, prevention is also more important. So that slippage management, we are also focusing on slippage management and then that will definitely help us going forward.