Q1 NPA weighed by 3 A/cs turning bad but worst over: PTC Fin

In an interview to CNBC-TV18, Pawan Singh, Director & CFO of PTC India Financial Services told CNBC-TV18 that the company saw a sharp spike in gross non performing assets because of three accounts turning sub-standard."We are very closely engaged with management and wherever the change of management is required, we are working on that and hopefully we should be able to work around the majority of the non-perfoming assets (NPA) projects", he said.Below is the verbatim transcript of Pawan Singh’s interview to Latha Venkatesh & Nigel D'Souza on CNBC-TV18.Latha: It looks like a troubled quarter, let me start first with the rise in gross non performing loans (NPLs) -- risen by 80 percent; from Rs 293 crore you have gone up to Rs 529 crore. Is that one big account that went bad? What happened and will we see more of this?A: The NPAs have gone up because of three accounts, which turned into sub standard. One was an account, which is Rs 125 crore, another two accounts were there which constitutes roughly about Rs 110 crore. So, that has led to the increase in figure. However, these accounts were already figuring in our restructured books and we had made provisions for them in the last quarter.However, having said so in fact these three assets we are working very closely with the promoters and see as to how these projects can be further taken to completion and wherever the change in management is required we are working on that. So, we hope to have a solution happening very soon on these three projects.Nigel: This quarter was not great by any stretch of imagination but going ahead do you believe that in fact you could see your gross NPAs come down from the levels because they have ballooned up by more than a 150 basis points just in the last quarter? By the end of this year what kind of gross NPA numbers can we have?A: This gross NPA is a percentage of my assets, which we have. So we have been able to demonstrate a certain kind of growth. So, as a percentage -- even if we stand at what we are -- it is going to come down.However, having said so also let me tell you about the qualitative aspect of the NPAs -- we are very closely engaged with management and wherever the change of management is required, we are working on that and hopefully we should be able to work around the majority of the NPA projects.Latha: Can we therefore say that 5.8 is about the peak? You will be able to see a lower ratio to next quarter or by end of the year?A: My total restructured asset is Rs 750 crore out of which roughly over Rs 500 crore is the NPA and balanced restructured asset is only because of extension of date of completion. As per the Reserve Bank of India (RBI) norms, we have to make provisioning though the assets are standard. So, that is only an extension of debt, so my stressed assets remain at Rs 750 crore.For full interview, watch video.