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Analyst Meet / AGM
16-May-19
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Conference Call
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Indian Bank
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Targets loan growth of 13-15%, slippages to dip to Rs 800-900 crore per quarter in FY2020
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Indian Bank conducted a conference call on 14 May 2019 to discuss the financial results for the quarter ended March 2019. Padmaja Chundru, MD & CEO of the bank addressed the call:
Highlights:
- The bank has continued to report health performance with strong business growth of 16% end March 2019. The loan book of the bank increased 16%, while deposits also moved up 16%. The share of retail, agriculture and MSME loans has increased to 58.1% of overall loans.
- The bank has exhibited sharp decline in fresh slippages of loans to Rs 962 crore in Q4FY2019, of which one major account contributed to slippages of Rs 300 crore.
- Most of the exposure to IL&FS has been classified as sub-standard. Of the total exposure of Rs 1600 crore to IL&FS standard exposure stands at Rs 254 crore. The provision coverage for IL&FS account stands at 23%.
- The SMA 2 category loans of the bank stands at Rs 2360 crore end March 2019. As per the bank, about 50% of the SMA 1 exposure is corporate.
- The bank has exposure of Rs 1300 crore to DHFL, which is standard getting serviced on time.
- The exposure to Indiabulls Housing Finance stands at Rs 1624 crore.
- The exposure to ADAG stands at Rs 700 crore, of which Rs 500 crore is NPA relating to two accounts. The bank has made provision in line with the regulatory requirement.
- The exposure to Essel group stands at Rs 100 crore, while the bank does not have exposure to telecom, airways and media group.
- The bank has restructured Rs 926 crore of loans in the MSME segment since January 2019, on which a provision of 5% has been made.
- The standard restructured assets of the bank stood at Rs 2000 crore end March 2019.
- The provision divergence of the bank for FY2018 was Rs 220 crore, which has been fully provided in Q4FY2019.
- The bank is planning to sale stake in two subsidiaries of which Ind Bank Housing is deposit taking NBFC where the bank is planning to bring in a strategic partner. The bank is also planning stake sale in Ind Bank Merchant Banking services.
Guidance for FY2020
- The bank is targeting loan growth of 13%-15% in advances as well as deposits.
- The bank aims to reduce NNPA ratio to 3%-3.1% by March 2020.
- The slippages are expected to decline to Rs 800-900 crore per quarter.
- The bank expects normal recoveries of Rs 1300 crore and upgrades of Rs 600 crore in FY2020. The recoveries of Rs 800 crore are expected from NCLT exposure.
- The bank expects to maintain stable NIM of 3% in FY2020.
- The cost-to-income is expected at 42-43%.
- The bank is planning to raise capital in Q2 or Q3FY2020.
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