Fresh slippages Rs 200 cr; to sell assets to cut NPAs: SBBJ

Below is the transcript of Jyoti Ghosh's interview with Latha Venkatesh and Ekta Batra on CNBC-TV18.

Latha: Can you take us through the non-performing loans (NPL) position? It rose by about 6 percent and in terms of a percentage of your book, it was up by about 14 bps, can you tell us what were the fresh slippages, fresh restructured assets?

A: NPLs or non-performing assets (NPAs) has been a major concern area for all public sector banks. We are below the average of public sector banks, we are still even after additions we are at 4.38 percent. There has been additions of about Rs 1,000 crore during the financial year.

We had a big hit in one of the accounts, Rs 300 crore and some Rs 150 crore and Rs 100 crore. Aggregatively there were 26 additions over close to Rs 10 crore and above loans but then taking it across the year, rest two months, I expect that we will be going in for some sale of assets, some of them might get upgraded and I may say that the acquisition will have a slowdown in the next two months of this financial year and progressively over the next financial year it will definitely show improvement in the rate.

Latha: I was just wanting some specific number on how much of fresh slippages you generated in Q3 itself and how does it compare to Q2 slippages?

A: Q3 we generated net acquisition close to Rs 160 crore.

Ekta: What was your fresh restructuring?

A: Our total NPA plus restructured assets have reached a level of 13 percent, which is up than the previous quarter and it is high but then most of the restructuring of the large assets we have more or less covered.

Latha: When you say that in the next two months and the following quarters you would expect the NPL stress to decrease, can we say that this 4.4 percent is the highest, you may not rise beyond that?

A: It all depends on the retail loan portfolio. We have kept it under control. But going across the next two months there maybe slight dips in SME and all. We are following up certain accounts everyday so that we can keep them regular. You just asked about restructuring, we have restructured about 5 large accounts aggregating Rs 256 crore in this financial year.

Ekta: What would your incremental restructuring pipeline be and how much more do you think you can do in terms of slippages in the next quarter and how much of that would be from the restructured book?

A: We will restructure around another Rs 400 crore which will include across the board large advances, small advances, retail and everything. When stress is there in the economy, if the account is a going concern, the loan has to be restructured to give them some breathing time to come back in shape. So SBBJ is seriously looking at restructuring of at about Rs 400 crore and fresh slippages were about Rs 200 crore.

Latha: What did you do by way of margins, how does it compare with the quarter ago margins?

A: Our net interest income (NII) went up in nine months by 7.55 percent. Operating profits we have done well, nine months we have grown by 25 percent.

Ekta: Can you leave us with what you did in terms of net interest margins (NIMs) this quarter?

A: NIMs were reduced this quarter by about 4 bps from 3.51 to 3.47 which is still very high compared to industry level.

Latha: Any changes in the capital structure, are you any closer to merger with State Bank of India (SBI)?

A: Nothing on the merger of any of the associate banks with the parent SBI.

Latha: Will you be raising capital then?

A: We will be assessing bonds for about Rs 200 crore.

Latha: Not equity?

A: No, we will be taking tier II bonds and we will come to the market shortly.