BoM expects only ₹1,000-1,500 crore loan book to be restructured3 min read . Updated: 22 Nov 2020, 03:00 PM IST
- The bank's total advances stood at ₹1,03,408 crore as on September 30, 2020
- The lender has also entered into the credit card business and has already issued close to 5,000 cards
State-run Bank of Maharashtra is expecting only ₹1,000 to 1,500 crore of its total advances to come up for one-time restructuring under the Reserve Bank of India's scheme before December 31, its managing director and CEO A S Rajeev said.
The lender had earlier estimated around ₹3,000-4,000 crore from its moratorium book to come under one-time restructuring. However, over a period of time the moratorium book itself came down drastically from 27% in March to 15-16% ( ₹14,000-15,000 crore) as of end August, he said.
"We had earlier expected that 15-20% of the total moratorium book will go for restructuring. But now we think only ₹1,000-1,500 crore from our total advances will come up for restructuring," Rajeev told PTI.
The bank's total advances stood at ₹1,03,408 crore as on September 30, 2020.
In August, the Reserve Bank of India had announced one-time restructuring for personal and corporate borrowers affected by COVID-19 related stress. Under the scheme, the resolution has to be invoked by December 31, 2020.
So far, the lender has restructured 800 small accounts, including MSMEs, worth ₹40 crore, under the scheme.
"There are one or two bigger accounts worth ₹150-200 crore in the pipeline (for restructuring). These are consortium lending accounts and the decision on restructuring will be taken by respective leaders," he said.
In the quarter ended September 30, 2020, the Pune-based bank reported a 13.44% growth in its standalone profit after tax at ₹130 crore as against ₹115 crore in the same quarter of the previous fiscal.
On a consolidated basis, its net profit stood at ₹130.44 crore in the second quarter of FY21, compared to ₹115.15 crore last year in the same quarter.
The growth in profit was on account of higher net interest income, lower bad loan provisioning and reduction in operating expenses.
"Last (Q2FY21) quarter was comparatively very good. I am sure that our numbers would be better in the next quarter as compared to the September quarter because we have already made provisioning of more than ₹1,000 crore related to COVID or for any kind of emergency," Rajeev said.
The lender does not foresee any issue in terms of provisioning till March 31, 2021.
During the first half of the current fiscal, the lender's recoveries stood at ₹678 crore and it expects to recover another ₹1,000 crore during the second half, Rajeev said.
In the April-September period, the bank settled worth ₹225-250 crore of accounts under its one-time settlement schemes (OTS) and has recovered almost 60% from those accounts. It expects some more recoveries from such accounts before March 31, 2021.
In the second half, it expects around ₹250 crore to ₹300 crore settlement under OTS.
The lender's gross NPA reduced to 8.81% in the September quarter from 16.86% last year. Net NPA declined to 3.30% as against 5.48% in the same quarter of the previous fiscal.
Rajeev said he expects gross NPA to be below 8% and net NPA lower than 3% by March-end.
He sees an addition of not more than ₹500-600 crore in NPAs each in Q3 and Q4 of the current fiscal.
In the first half, the bank's deposits grew at 12.15% year-on-year and advances at 13% during the first half and it expects the same trend in the second half also.
"We are of the view that the total deposits may grow at around 12-14% and advances may grow at 14-16% in the second half," he said.
Capital adequacy of the bank stood at 13.18% with common equity tier 1 ratio of 10.31% as on end-September. It has already received board approval for raising ₹3,000 crore, which includes ₹2,000 crore through equity and ₹1,000 crore from bonds.
"We may raise funds through bonds (AT1 and tier II) during the second half in various tranches. We don't have AT1 bonds at present so we will raise ₹400-500 crore of such bonds. We will also raise ₹400-500 crore tier II bonds, if required. With this our capital adequacy position will be above 14% for the current year," Rajeev said adding that the decision on raising equity capital will be taken in the next year.
He said the bank may not require any capital infusion from the government in this fiscal.
The lender has also entered into the credit card business and has already issued close to 5,000 cards. It is looking to expand its base into the segment from the fourth quarter of the current fiscal, Rajeev added.
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