In an interview to CNBC-TV18, Jatinderbir Singh, chairman and managing director, Punjab & Sind Bank shares his views on the bank’s Q4 numbers.
Below is the edited transcript of Jatinderbir Singh’s interview with Sumaira Abidi & Reema Tendulkar on CNBC-TV18.
Sumaira: Could you tell us what your net interest margins have stood at this quarter as well as the comparable figure?
A: Our net interest margin for the year 2014-2015 has been 1.8 percent and in the 2013-2014, it was 1.88 percent.
Sumaira: This time around your asset quality has remained stable, so gross non-performing assets (NPAs) have gone down to below that of 5 percent mark and even on the net NPS side, it is just about 3.5 percent. Do you have much more room to improve your asset quality from here?
A: These are challenging times for our banks and you may have noticed that we have posted profits of Rs 121 crore. This previous year has been quite challenging for all of us. NPAs and then restructuring in the last quarter was responsible for Rs 47 crore of addition to our NPAs. This was due to restructuring so that was major erosion in our profits. We had to make provisions. In the last year, in spite of dip in the credit offtake, we have been able to register an increase of 12 percent in the advances and that is something satisfactory for us.
The strategy for current financial year is to focus on current and saving accounts combined with the retail lending. We are also optimistic that the economy will pick-up. This is our optimism that the whole banking industry will bounce back.
Reema: To get in some numbers, could you tell us what the slippages were in this quarter as well as the total restructured amount?
A: Total restructure amount was Rs 1,174 crore and that was in the fourth quarter only.
Reema: Rs 1,174 crore?
A: Fresh restructuring was Rs 2,347 crore in the year. In the fourth quarter, it was Rs 1,174 crore.
Sumaira: What about the fresh slippages?
A: Slippages in the year 2014-2015 was Rs 1,242 crore and in the previous year, it was Rs 1,620 crore, so there is dip in that. Variance is Rs 378 crore.
Sumaira: Where are you seeing the maximum amount of stress now? Is it sector specific or have there been any big lumpy accounts?
A: Those details we are working out, but this is a big picture that I have just intimated to you.
Reema: The NII or the net interest income growth seems to be quite muted in Q4 which is about 1.8 percent. Even for the full year, the NII growth was only about 3.50 percent. Will the bank be cautious in lending even in FY16? What can we expect by way of the NII growth?
A: This growth is largely concerned with our cost of deposits. So, our focus would be on current account and saving account (CASA).
Reema: Long back there were some reports about the finance ministry considering merging of few state-run banks. That report also included Punjab & Sindh Bank as one of the possible banks, which could be merged into a larger bank.
A: I don’t want to comment on that. We are working harder to improve the financials of the bank. Our focus in the current financial year is on attracting low cost deposits and focusing on retail lending.
Reema: Your gross NPAs have improved in Q4 compared to Q3, but on a year-on-year (YoY), basis the gross NPAs have worsened from 4.41 to 4.74 percent. Do you believe the worst is over in terms of asset quality? Can your gross NPAs improve FY16?
A: I think so. As the economy gets back to buoyancy, we will be able to arrest or stem the slippages as well as redeem those quantum of NPAs.
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