Bank of India, which reported a 41% year-on-year jump in its second-quarter net profit at Rs 179.07 crore in the September quarter, expects non-performing assets to decline steadily in the coming quarters, MD & CEO Dinabandhu Mohapatra told reporters after the announcement of the second quarter result. He expects the government’s recapitalisation programme to boost credit growth. Edited excerpts:
What is your outlook on the bank’s non-performing assets and credit growth?
As far as our non-performing assets are concerned, if there are no unexpected or unwarranted developments, definitely our progress will be very steady. We are working hard on that front and we are very optimistic. As for growth, we have already raised Rs 500 crore and we will be accessing the market again through a QIP. During the last six months, we have re-balanced our balance sheet without raising the topline. Now we are aiming for faster growth. Recently the government has declared the capitalisation programme, which will also help us. So going forward, we will be growing more than the industry.
How will the government’s recapitalisation programme be beneficial for the bank?
The recapitalisation programme has come as a huge relief and confidence boosting measure. It will augment credit growth, especially to productive sectors such as SME and the infrastructure segment. It will also incentivise banks to proactively take measures under the insolvency and bankruptcy code for resolution of NPAs and bankers will be able to absorb higher provisioning impact under the IBC.
What is the progress on the resolution of stressed assets at the National Company Law Tribunal?
If the big cases get resolved, it will give a fillip to other cases. And we are quite hopeful that is going to happen in a big way. Today, the promoters are interested, the bankers are interested, regulators are interested and the government is interested. In some of the cases, the process had moved from the expression-of-interest stage to the bidding stage. So by the end of December or early January, we will see the bids coming for some of the big cases.
What is your provision coverage ratio?
We are one of the few banks that have covered 65% of their NPA. The unique advantage we have is that for some of the big accounts in the first list of defaulters that was referred to the NCLT, we have 100% provisioning. So we will benefit from the resolutions that will happen in December-January. In the second list, our exposure is Rs 3,300 crore in 16-17 accounts. We have more than 50% provisioning for these accounts.