Expect NIM at around 2.7% in H2FY15: Oriental Bank

A: As far as fresh slippages are concerned in first quarter we had Rs 1,400 crore whereas in this quarter it has to come down below Rs 1,000 crore, it is Rs 978 crore. So we have seen a positive trend as regards containing of slippages is concerned and upgradation is about Rs 52 crore this quarter and total if we see the first half it is at Rs 340 crore including cash recovery and upgradation and recovery from recorded interest. So, the trend has been seen slightly improving and going forward we wish to have lesser slippages and more recoveries.

Reema: And fresh restructure assets?

A: Total restructuring was Rs 700 crore as against our expectation of Rs 500 crore and next quarter also we expect slightly more because this financial year most of the banks would be going for more restructuring. So we expect about Rs 1,000 crore of fresh restructuring in the third quarter as against Rs 700 crore that we have done.

Nigel: Could you detail few more numbers. What is your net interest margin (NIMs) looking like?A: NIM is 2.63 and we are anticipating it should be around 2.65 to 2.70 for the next half.Nigel: So for this quarter it was 2.63 percent?A: Yes.Nigel: And you are expecting it to improve in the second half of the year to around 2.65-2.7 percent?A: Yes.

Nigel: Also could you tell us with regard to your provisioning. That had jumped up close to around 18-20 percent just on a sequential basis. Why is that?A: Provisioning is about 59 percent now. It has slightly come down and actually what has happened is that during the whole year our total slippages have also increased. If you see our total Non Performing Asset (NPA) increases by Rs 4,000 crore during one year. So that has affected our provisions requirements and plus when asset goes from sub-standard to doubtful then too provisioning also increases. So we would like to come up again above 60 during the next half year.Reema: What can you guide in terms of your gross NPA ratios. That has gone up quite a bit if you look at it on a quarter-on-quarter (Q-o-Q) basis. It currently stands at 4.74 percent. What is your forecast?A: If you see advances have not increased and our NPA has increased and maybe it was a conscious decision not to grow very fast as far as advances are concerned. Since advances have not increased and NPA has increased so percentage wise it has gone up from 4.32 to 4.74 but now we see that our advances level will improve during the second half and since NPA slippages are also coming down this ratio will not have that adverse effect of what we have seen now.

Nigel: Give us some guidance, what can we see your gross NPAs at in the second half of the year and going ahead as well do you believe it has peaked out around 4.74 percent?A: Yes, as I said our slippages have come down during the second quarter. First quarter it was Rs 1,400 crore, which came down to Rs 978 crore. Going forward also we expect that we will contain our slippages and since we are expecting growth in advances during the second half of year we expect that this percentage of gross NPA to advances will not be that steep in increase as we have seen in the past.Reema: What was the sale of loan to ARCs this quarter?A: In this quarter it has been a very small amount of Rs 34 crore only which we sold. We have not been very aggressive on that.Reema: Also can you tell us what the advances growth was in Q2 and when you say you expect a pickup in advances what would be the growth in advances in the second half?A: As I said we have not grown in advances; even during this quarter it has not been much growth but during the second half we expect better growth and we are also taking some policy decisions to improve the empowerment at field level and that will definitely help in increasing in the advances. In this quarter there has not been much growth in advances, almost stagnant we can say.