Rs 400-500 cr worth accounts cause for trouble in FY17:Dena Bank

The slippages in the fourth quarter of FY16 for Dena Bank amounted to more than Rs 1600 crore, Ashwani Kumar, Chairman and Managing Director, Dena Bank told CNBC-TV18. The company also made recoveries and upgradations worth Rs 1000 crore in the same year.But there are one or two accounts worth around Rs 400 to 500 million which could cause problems for the bank, said Kumar.  Bank's total restructured books currently stand at around Rs 7900 crore out of which 27 percent slipped in the last year.Below is the verbatim transcript of Ashwani Kumar’s interview with CNBC-TV18's Sonia Shenoy and Latha Venkatesh.Latha: Your non-performing assets (NPAs) actually haven't risen much in fourth quarter over the third quarter. Can you tell us something about your slippages, how were they in the fourth quarter?A: Slippages during this quarter were about Rs 1,600 crore plus. But the good thing was that we could make a recovery of about Rs 1,000 crore upgradation, recovery, write offs. So, net impact was Rs 600 plus crore. That was a good area where we could do recoveries. We have fully provided for asset quality review (AQR) now. None of the accounts are left. In fact we had covered all the assets which were NPA as per our view in December except some accounts where our view was slightly different. So, we requested Reserve Bank of India (RBI), gave our point of view and some accounts showed sign of improvement and they are not in the NPA list now.Latha: I am more interested in how FY17 will pan out. It is the season of giving a watch list. So, if you can give us a watch list? How many restructured assets that can slip? How much of your book is in separately managed account-2 (SMA2)?A: My total restructured book is about Rs 7,900 odd crore, roughly you can say Rs 8,000 crore out of which roughly 27 percent slipped in the last year. Going forward we have some lumpy restructured accounts which may give us trouble but as such we don\\'t have many lumpy accounts left to be restructured or to slip except one or two accounts which are showing signs of stress. And as you already seen from Q3 to Q4 there is an improvement in NPAs.We hope that the pressure of stressed assets will slowly vain off - if not June quarter then definitely from September quarter onwards. Having said that the main issue which remains and which will be a cause of anxiety for a lot of us the aging of the assets and the provisioning required thereof. So, that would give stress to the balance sheet in terms of profitability.Sonia: You said one or two lumpy accounts. Can you just give us a little more detail on how much is the amount involved?A: I said one or two lumpy accounts are giving us trouble. So, if we are able to see and recover from them then the slippages would not be very high but these lumpy accounts are around Rs 400-500 crore. But we should be able to set them right in the remaining one and half months period.Sonia: Your recoveries in the fourth quarter are at Rs 1,000 crore, that is very good? Can we assume Rs 1,000 crore of recoveries every quarter in FY17, say a total of Rs 4,000 crore?A: No, Rs 4,000 crore recovery would be too aggressive a figure. So, maybe difficult but the whole - in fact at head office half of the floor is only doing recovery. There is about 10 officers headed by DGM and reporting on daily basis to ED and me who are on recovery. We hope that lot of efforts were made during last quarter and promises were made to upgrade that accounts. So, we hope substantial upgradations to be made during this quarter and as it is predicted that the monsoon would be good and consequentially the economy should start performing very well. Lots of stress have been taken by the government.