Merger with SBI should be completed before March 31: SBM

In an interview to CNBC-TV18, N Krishnamachari, MD of State Bank of Mysore spoke about the results and his outlook for the company."The merger will definitely happen before March 31 but whether it will happen on December 31 is still a speculation," he said.Below is the verbatim transcript of N Krishnamachari's interview to Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Sonia: Can you give us some guidance, what were the slippages in this quarter and what is the expectation going forward?A: Last quarter when we went for provisioning, we had identified certain weak accounts in our watchlist and made provisions for them. Quite a number of them have slipped in this quarter that is why we have a very high slippage.Going forward, I think the position is bottomed out because most of the weak accounts have been identified and now classified. In this quarter, the State Bank group has come out with a policy of keeping the asset classification uniformly the same across the group.Latha: Should we assume that now you are totally aligned and further non-performing assets (NPAs) don’t have to be recognised just for the alignment purpose?A: No, the alignment purposes were completed last quarter in terms of provisions required. So we don’t see any further slippage on that.Latha: What is the increased slippages? We only have your higher GNPA, what was the slippage?A: The slippage during this quarter has been to the extent of Rs 3,120 crore. Out of which Rs 2,750 crore has come from the corporate segment.Latha: How much of it was because you aligned your NPA classification to State Bank of India (SBI)?A: Not all of them because as I said, some of the large steel sector and textile sector accounts were aligned with SBI in terms of provisions but they slept on their own without we having to go for the alignment.Latha: When does the merger gets completed? Will it be Q3 or Q4?A: As promised, it will definitely happen before March 31 but whether it will happen on December 31 is still a speculation.Latha: We can work with the 13 percent being the peak GNPA?A: Yes. Even if you look at it, my own position of NPA is not very far off. It is about 12 percent. So the deterioration is almost complete.