U.S. Markets open in 2 hrs 59 mins

Edited Transcript of BANKINDIA.NSE earnings conference call or presentation 30-Jul-19 10:30am GMT

Q1 2020 Bank of India Ltd Earnings Call

Mumbai Aug 6, 2019 (Thomson StreetEvents) -- Edited Transcript of Bank of India Ltd earnings conference call or presentation Tuesday, July 30, 2019 at 10:30:00am GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Chaitanya Gayatri Chintapalli

Bank of India Limited - Executive Director

* Neelam Damodharan

Bank of India Limited - Executive Director

================================================================================

Conference Call Participants

================================================================================

* Amit Kumar Singh

Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst

* Arjun Tandon;Matsya Capital;Analyst

* Ashok Kumar Ajmera

Ajcon Global Services Limited - Executive Chairman, CEO & MD

* Bhavik Shah;B&K Securities Limited;Equity Research Analyst

* Harshvardhan Agrawal

Infina Finance Private Limited - Investment Analyst

* Mahrukh Adajania

IDFC Securities Limited, Research Division - Director

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Ladies and gentlemen, good day and welcome to the Bank of India earnings conference call. This is to inform you that the full financial results and a detailed PowerPoint presentation has been uploaded on the web portals of BSE, NSE and Bank of India, and I'm sure you must have gone through the presentation. (Operator Instructions)

Let me introduce the management of Bank of India available for the conference call. Shri N. Damodharan, Executive Director; Shri A.K. Das, Executive Director; Shri C.G. Chaitanya, Executive Director; Shri K.V. Raghavendra, General Manager and CFO; accompanied by other general managers.

I will now hand over the conference to Shri N. Damodharan, Executive Director. Thank you, and over to you, sir.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [2]

--------------------------------------------------------------------------------

Good evening all. I'm Damodharan here. Along with me, Mr. Das and Mr. Chaitanya, [colleague] Executive Directors and other general managers are here to answer -- take up your queries.

The presentation is already -- you must have gone through. So in a short talk, I would like to brief that we have given a stable picture of the bank financials in this Q1, taking ahead the performance of Q4 of the previous financial year.

The operating profit and net interest income is comparable if the exceptional one-off of March '19 and June 2018 are factored in, in those quarters. Similarly, the other income. In operational expenses other than the wages, we have reduced the operational expenses. The CASA has gone up by 6.04% by INR 10,000 crores year-on-year basis. The cost of deposits have come down and yield on advances has improved. The slippage control is, to some extent, possible in the corporate sector where the slippages has been brought down to 30% as compared to the earlier 50% of the total slippages. The loan growth in RAM is 7.25%, and the corporate portfolio it is 12.13%, and the government-guaranteed accounts, it is around 32%.

We have a sound provisioning of 77.18%. And the net provision coverage ratio is also good at 68.92%. The GNPA and net NPA has marginally elevated, and the risk-weighted assets has improved from INR 309,000 crores to INR 2,99,000 crores in June '19. The market risk weighted -- risk weight is reduced by 25%. There has been a rating improvement -- rating profile improvement in the corporate portfolio, above INR 5 crores. The A rated and above advances has increased by 3% from 55% to 58%. BBB advances has come down from 15% to 9%. Below BBB, it is -- it has reduced by 1% to 13%, and unrated, which includes the common guaranteed advances, it has increased from 16% to 20%.

In SME 1 and 2 above INR 5 crores, there has been a marked improvement from INR 11,655 crores in June 2018, it has come down to INR 6,875 crores. And at this moment, is both partly the accounts have moved to regular category and also moved to the lower [SMA-0] category. Some of the accounts, a small portion, has moved to NPA category. Our focus for the next 3 quarters will be growth in net interest income, operating profit and fee income, that is improving the return ratios, taking forward the stable scenario obtaining in the Q4 March '19 and Q1 June '19.

Slippage control and recovery will be another important focus area for which we have already created a stress-effect management vertical from head office down up to the zonal office level. The vertical has been established and started operating effectively. The risk management area has been again strengthened. Fraud risk management enterprise-wide software we are introducing and a separate department has been established for this. Similarly, credit monitoring department has been strengthened with war and watch rooms. And we also have the area managers set up at the ground level for recovery and credit monitoring.

Capital position is comfortable and facilitates a healthy growth in advances. And we also have our capital plan in near future, maybe in Q3 and Q4. After results of Q2 are out, then the progress is well established and the market will be responsive, we propose to go for capital mobilization of up to INR 3,500 crores as approved by the Board. The CASA growth, which is considerable, will be taken forward, and the rating profile will be further strengthened. The recovery focus, we expect or we will work towards reducing the gross NPA to around INR 56,000 crores from the present INR 62,000 crores by March 2020.

In credit, we expect a growth of 10%. And in other areas which have been supplementing these 2, particularly, we will be working hard for better results.

Thank you very much.

--------------------------------------------------------------------------------

Operator [3]

--------------------------------------------------------------------------------

Sir, we open it up for questions?

--------------------------------------------------------------------------------

Unidentified Company Representative, [4]

--------------------------------------------------------------------------------

Yes.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) The first question is from the line of Ashok Ajmera from Ajcon Global Services.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [2]

--------------------------------------------------------------------------------

Compliment to you, Mr. Damodharan and Mr. Das, Chaitanya and the whole team, of course, including Raghavendra, who is there compiling the accounts, for at least showing a reasonably good profit even in these difficult times. Having said that, I would like to straightaway know that what are the pressure points which have been addressed in this quarter and which are still going to be there in 2, 3 couple -- 2, 3 quarters forward, especially on DHFL, Essel Group and some of these groups which are talked about and are there in the news, which other banks also have managed to provide something for? So my first question is on that. Can I get the answer for this, and then go for some more observations and questions?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [3]

--------------------------------------------------------------------------------

Yes, please. If you are looking at the pressure points, what we are talking about on the NBFC sector of the -- maybe the IL&FS, the DHFL or the Essel Group, see, these are -- basically it is coming from the NBFC sector, and we have seen the resolution process is on for that. And we look forward how best the resolution will go through, and then we can come out nicely.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [4]

--------------------------------------------------------------------------------

So what kind of provisioning has already been done for DHFL, like which is a fresh in this quarter?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [5]

--------------------------------------------------------------------------------

DHFL is presently -- see if you look at the DHFL path for the last 7, 8 months, they could able to honor it by maybe INR 40,000 crores what they have paid and that it is in that area of SME 01 and it is in that standstill period of the ICA.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [6]

--------------------------------------------------------------------------------

Okay. So I mean, then we can expect some provisions in the coming quarters to come in, I mean, in this account also. My second question was on the advances side. Mr. Chaitanya, sir, advances this quarter have been declined, if you look at the domestically from INR 328,000 crores to INR 324,000 crores, and on the top of it, we are expecting a growth of 10% by the year-end. So filling this INR 4,000 crore of shortfall and then again, going for INR 32,000 crore of additional, how do you see in looking at your capital adequacy ratio also, I mean how do you plan to achieve this target, of course, Mr. Chaitanya and the whole team?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [7]

--------------------------------------------------------------------------------

Yes. What we are looking at is, this quarter we don't find it as an indicator for the coming quarters because as usual the Q1 will be always a subdued one. If you look at the Bank of India, the way we have structured ourself is, we are giving a lot of thrust on this INR 5 crores and above the corporate advances what we look at it. We focused around 300 branches where we wanted to do a focused financing up to INR 25 crores account-wise, I'm talking about. So these branches, when we look at it and when we keep the focus and these are all headed by the senior-level people and then the way the credit experts are presenting, we wanted to distribute the credit like that. We don't want it to keep any concentrated credit.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [8]

--------------------------------------------------------------------------------

You said 300 branches.

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [9]

--------------------------------------------------------------------------------

300 branches, which are a focus for doing this. These branches are activated now, and we hope that these branches at least they start doing 1/1 loan also per month, [within] a couple of quarters, they will cross the INR 10,000 crores what it is we're looking at for that.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [10]

--------------------------------------------------------------------------------

All right. On this capital infusion, you said...

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [11]

--------------------------------------------------------------------------------

On the capital side, I have not touched it. The capital side, we are sufficiently capitalized at this point of time, and we have the growth capital also to move forward. And we have capital-raising plans in the future also.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [12]

--------------------------------------------------------------------------------

But you see, looking at the current rate or the pressure on the share prices also, do you think even in the third or fourth quarter also raising INR 2,000 crores or INR 3,000 crores, I mean you'll be able to attract the money at a good price? Or will it be a good time to even go for that because the stock is under great pressure overall, I mean, in the whole -- the markets are also down, and we don't find any major achievement maybe in the second or third quarter? So is there any other plan to meet these targets without going forward for the capital mobilization? How do you plan to meet if you at all do not raise the capital maybe in the -- not even up to the fourth quarter or maybe in the next year?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [13]

--------------------------------------------------------------------------------

As you said, you look at -- you said that the markets are also down for that. But what we are looking at is, for the capital raising it, we are looking at that sustainability side of it where we wanted to -- this is the second quarter where we are making the profits, and we wanted to look at that sustainability. If you are looking at my stress portfolio, the way it is coming down and the way the focused corporate credit or the retail credit where we keep the focus and we want to move on or if you look at the NCLT where we made the 100% provisions and then going to come in the coming couple of quarters, that will be a good guidance for the investors also to step in and to come to us for -- when we go to the market to raise the capital.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [14]

--------------------------------------------------------------------------------

So my last question is on NCLT 1 and 2 only that INR 5,927 crores, which you said you have provided 100%, what are the prospects in next 2 quarters of how much percentage of it we can get which straightaway goes in the income?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [15]

--------------------------------------------------------------------------------

See, in NCLT, at least we are expecting in Q2 around -- our exposure to go down by INR 2,000 crores to INR 2,400 crores. We are having about 6 accounts where the resolution is almost near.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [16]

--------------------------------------------------------------------------------

All right. No. That's good. One suggestion only that why don’t we again restart the system of having a physical analyst meet, so that we can interact little more in a better way face to face. I think that will serve more better purpose rather than this con call when we don't look at the others. I mean, it's -- sometimes the discussions become more effective if we are personally meeting.

--------------------------------------------------------------------------------

Unidentified Company Representative, [17]

--------------------------------------------------------------------------------

Yes, that's correct. Fully agree with your view, sir. Like the market, the weather has also become very uncertain.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [18]

--------------------------------------------------------------------------------

I had suggested to Mr. Raghavendra that you hold next time the physical analyst meet like what Bank of Baroda did and what the State Bank of India is doing. And definitely, I'm very, very sure that Bank of India will definitely produce some better results and better recoveries.

--------------------------------------------------------------------------------

Operator [19]

--------------------------------------------------------------------------------

(Operator Instructions) The next question is from the line of Amit Singh from B&K Securities.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [20]

--------------------------------------------------------------------------------

Firstly, sir, on the slippages front, sir, where exactly have these slippages have come from?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [21]

--------------------------------------------------------------------------------

See, these slippages, out of INR 3,683 crores, 1/3 is from corporate segment and around INR 1,200 crores is from agriculture, and retail is around INR 450 crores and MSME, the balance. And in agriculture, again, it is little elevated because of -- in the Q1 because of the debt rates and various other expectations. And we have those claims to be settled by the government.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [22]

--------------------------------------------------------------------------------

And sir, within the corporate, sir, if you could specify which sectors have they come from?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [23]

--------------------------------------------------------------------------------

Many small accounts comprise this total INR 1,000 crores, but the one is -- one major account is of EPC contracts and another is aviation.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [24]

--------------------------------------------------------------------------------

And sir, apart from this, sir, what is our exposure to the troubled names in the industry, like Vodafone, Idea and Essel Group? What is our exposure to these kind of exposures, sir?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [25]

--------------------------------------------------------------------------------

Vodafone, we don't have. INR 383 crores is Essel Group.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [26]

--------------------------------------------------------------------------------

Okay. And sir, what would be our exposure to Cox & Kings?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [27]

--------------------------------------------------------------------------------

We don't have...

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [28]

--------------------------------------------------------------------------------

We don't have any exposure to Cox & Kings.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [29]

--------------------------------------------------------------------------------

And sir, to this Jain Irrigation and Radius Group?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [30]

--------------------------------------------------------------------------------

Jain, we don't have.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [31]

--------------------------------------------------------------------------------

Okay. And for Radius, sir, do you have any...

--------------------------------------------------------------------------------

Unidentified Company Representative, [32]

--------------------------------------------------------------------------------

Don’t have that, sorry.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [33]

--------------------------------------------------------------------------------

Okay. And sir, this Hubtown Developers...

--------------------------------------------------------------------------------

Operator [34]

--------------------------------------------------------------------------------

Excuse me, this is the operator. Mr. Singh, can you please switch to the handset mode if you're using the speaker because it's impacting the call audio.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [35]

--------------------------------------------------------------------------------

Okay. Okay. And sir, last -- sir, what is our exposure to this Hubtown Developers, sir?

--------------------------------------------------------------------------------

Unidentified Company Representative, [36]

--------------------------------------------------------------------------------

We don’t -- maybe a small, not that much.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [37]

--------------------------------------------------------------------------------

And sir, to this Café Coffee Day account, sir, do we have any exposure there?

--------------------------------------------------------------------------------

Unidentified Company Representative, [38]

--------------------------------------------------------------------------------

We have a small exposure. Around INR 20 crores, we have.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [39]

--------------------------------------------------------------------------------

Okay. We have only INR 20 crores. And sir, just lastly, sir, what is the nature of the claim at the Delhi Metro Airport account, which we have also specified in our GST filings?

--------------------------------------------------------------------------------

Unidentified Company Representative, [40]

--------------------------------------------------------------------------------

It is maintaining...

--------------------------------------------------------------------------------

Unidentified Company Representative, [41]

--------------------------------------------------------------------------------

It is a standard asset business.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [42]

--------------------------------------------------------------------------------

Okay. So sir -- and sir, what is our [5:25] refinancing exposure as of now?

--------------------------------------------------------------------------------

Unidentified Company Representative, [43]

--------------------------------------------------------------------------------

We can send the details later

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [44]

--------------------------------------------------------------------------------

We will send the details.

--------------------------------------------------------------------------------

Operator [45]

--------------------------------------------------------------------------------

The next question is from the line of Bhavik Shah from B&K Securities.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [46]

--------------------------------------------------------------------------------

Sir, can you give me a little more clarity on the Supreme Court verdict that is where -- because of which you kept account as standard?

--------------------------------------------------------------------------------

Unidentified Company Representative, [47]

--------------------------------------------------------------------------------

This is -- you're talking about the Delhi Metro.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [48]

--------------------------------------------------------------------------------

Yes, Delhi Metro.

--------------------------------------------------------------------------------

Unidentified Company Representative, [49]

--------------------------------------------------------------------------------

170 -- around INR 170 crores.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [50]

--------------------------------------------------------------------------------

So yes, sir, I'm asking as in buyer versus you know -- what does the Supreme Court order say that they have to keep a standard?

--------------------------------------------------------------------------------

Unidentified Company Representative, [51]

--------------------------------------------------------------------------------

Yes. On account also, we kept in standard category. But whatever provision was to be made, that was to be made, that call.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [52]

--------------------------------------------------------------------------------

Okay. And sir, there has been a lot of shifting into -- between the categories in the investment portfolio this quarter. Sir, are we expecting any huge gains from the fallen G-Sec yield in the coming quarters?

--------------------------------------------------------------------------------

Unidentified Company Representative, [53]

--------------------------------------------------------------------------------

In the G-Sec yields, we will be getting the -- we'll be getting some amount to the extent of around INR 200 crores, we'll be expecting because of G-Sec yields.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [54]

--------------------------------------------------------------------------------

Sir, INR 200 crores per quarter?

--------------------------------------------------------------------------------

Unidentified Company Representative, [55]

--------------------------------------------------------------------------------

Yes, this quarter.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [56]

--------------------------------------------------------------------------------

Okay. And sir, there was a recovery from this quarter?

--------------------------------------------------------------------------------

Unidentified Company Representative, [57]

--------------------------------------------------------------------------------

The total recoveries -- expected recoveries, that's what?

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [58]

--------------------------------------------------------------------------------

No. The total recovery this quarter, where did it come from?

--------------------------------------------------------------------------------

Unidentified Company Representative, [59]

--------------------------------------------------------------------------------

(foreign language) in Q1.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [60]

--------------------------------------------------------------------------------

Yes, in Q1.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [61]

--------------------------------------------------------------------------------

In Q1 around -- net recovery has been INR 1,052 crores. It is from various accounts and various segments because we had introduced our OTS scheme, nondiscretionary and...

--------------------------------------------------------------------------------

Unidentified Company Representative, [62]

--------------------------------------------------------------------------------

Nondiscriminatory

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [63]

--------------------------------------------------------------------------------

Nondiscriminatory scheme and around INR 10 crores has come from NCLT accounts. And various other recoveries, for example, claims received in agriculture debt waiver is around INR 145 crores. It has been from various sources. Not a -- a big chunk has not come from any particular account.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [64]

--------------------------------------------------------------------------------

Yes. Sir, I see your recoveries to be a little subdued this quarter. So how do you see the recoveries for the full year?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [65]

--------------------------------------------------------------------------------

I think recovery had been subdued because there had been some delay in the NCLT decisions coming. As I said earlier, if NCLT decisions come around INR 2,000 crores to INR 2,400 crores, NPA portfolios may go down because we have 5, 6 cases in very advanced stage. In addition to that, as I said, we are -- we have introduced an OTS scheme. And under this RBI 76 circular, another 5, 6 accounts have already -- come under the ICA process. And these are all time bound. Within 6 months, the resolution has to happen.

And in addition to that, we will be pursuing our ARC sale. Even though the market is tight, we propose to go and pursue that also. With all these things put together, the recovery scenario has to improve from Q2 onwards. And as I said earlier, our aim is to reduce the gross NPA to INR 56,000 crores. We will be working towards that goal.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [66]

--------------------------------------------------------------------------------

And sir, how much slippages do you guide for the full year?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [67]

--------------------------------------------------------------------------------

Around INR 12,000 crores.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [68]

--------------------------------------------------------------------------------

Okay. And sir, you mentioned some 5, 6 accounts having in the ICA process. Can you broadly give it a color which sector, which company that have been?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [69]

--------------------------------------------------------------------------------

In ICA...

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [70]

--------------------------------------------------------------------------------

As in they were initiated this quarter.

--------------------------------------------------------------------------------

Unidentified Company Representative, [71]

--------------------------------------------------------------------------------

Yes, DH...

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [72]

--------------------------------------------------------------------------------

Yes, DHFL was.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [73]

--------------------------------------------------------------------------------

DHFL Housing is one.

--------------------------------------------------------------------------------

Unidentified Company Representative, [74]

--------------------------------------------------------------------------------

GMR and Prayagraj.

--------------------------------------------------------------------------------

Unidentified Company Representative, [75]

--------------------------------------------------------------------------------

Power sector.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [76]

--------------------------------------------------------------------------------

GMR and Prayagraj are in ICA power.

--------------------------------------------------------------------------------

Unidentified Company Representative, [77]

--------------------------------------------------------------------------------

NBFC too. The DHFL and Reliance Group.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [78]

--------------------------------------------------------------------------------

Reliance. Reliance is also there in NBFC. These are the 5, 6 accounts we talked about.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [79]

--------------------------------------------------------------------------------

Okay. And sir, McNally Bharat, how is it doing in terms of books?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [80]

--------------------------------------------------------------------------------

It is NPA already.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [81]

--------------------------------------------------------------------------------

Is it this quarter?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [82]

--------------------------------------------------------------------------------

Yes. June quarter.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [83]

--------------------------------------------------------------------------------

So how much exposure do we have?

--------------------------------------------------------------------------------

Unidentified Company Representative, [84]

--------------------------------------------------------------------------------

Around INR 400 crores.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [85]

--------------------------------------------------------------------------------

Sir, out of INR 1,200 crores of corporate, INR 400 crores was from McNally Bharat?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [86]

--------------------------------------------------------------------------------

Yes, yes.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [87]

--------------------------------------------------------------------------------

So the rest INR 800 crores, was it granular or was it locked in?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [88]

--------------------------------------------------------------------------------

Aviation, as I said, Jet is one.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [89]

--------------------------------------------------------------------------------

Okay. So Jet would be around INR 300 crores?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [90]

--------------------------------------------------------------------------------

INR 265 crores.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [91]

--------------------------------------------------------------------------------

Okay. And sir, Suzlon?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [92]

--------------------------------------------------------------------------------

Suzlon...

--------------------------------------------------------------------------------

Unidentified Company Representative, [93]

--------------------------------------------------------------------------------

INR 82 crores.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [94]

--------------------------------------------------------------------------------

INR 82 crores.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [95]

--------------------------------------------------------------------------------

And sir, even that is NPA?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [96]

--------------------------------------------------------------------------------

Not yet. It is not.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [97]

--------------------------------------------------------------------------------

Not yet, sir. Okay. And sir, did you do any ARC this quarter?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [98]

--------------------------------------------------------------------------------

This quarter, we have not done anything.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [99]

--------------------------------------------------------------------------------

Okay. But we plan to have a good pipeline of ARC savings?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [100]

--------------------------------------------------------------------------------

Pardon?

--------------------------------------------------------------------------------

Unidentified Company Representative, [101]

--------------------------------------------------------------------------------

We have pipeline...

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [102]

--------------------------------------------------------------------------------

Could not get you?

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [103]

--------------------------------------------------------------------------------

Sir, as in -- do we have a good pipeline of ARC savings, like how do we...

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [104]

--------------------------------------------------------------------------------

See, we have identified accounts of around INR 30,000 crores. But we have already tried in many of those accounts in the previous year also. So it all -- it will depend upon the market dynamics, liquidity and various other things. Whatever the accounts that are in DRT and all where the assets are there or where the unit is viable, we try to go for ARC.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [105]

--------------------------------------------------------------------------------

Okay. Okay. And sir, last question, sir. Sir, can you broadly tell me as in what is SME 1 and 2 composed of, like which sectors are these mainly from? And what are the accounts sitting in the SME 1 and 2?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [106]

--------------------------------------------------------------------------------

SME 1 and 2, as we told, in June '18, it was above INR 5 crores, it was INR 11,600 crores, and now it is around INR 6,875 crores. Out of this, one is a very big -- big chunk is an aviation company, guaranteed by the government, that takes away 50% of that.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [107]

--------------------------------------------------------------------------------

So this will be Air India?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [108]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [109]

--------------------------------------------------------------------------------

Okay. And sir, any other corporate accounts?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [110]

--------------------------------------------------------------------------------

There are few corporate accounts, but not of size. It's...

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [111]

--------------------------------------------------------------------------------

In which sectors?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [112]

--------------------------------------------------------------------------------

They are of mixed sector.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [113]

--------------------------------------------------------------------------------

Like, sir, relating to some section of builders?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [114]

--------------------------------------------------------------------------------

No, not real estate, not commercial real estate. Some...

--------------------------------------------------------------------------------

Unidentified Company Representative, [115]

--------------------------------------------------------------------------------

Road sector.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [116]

--------------------------------------------------------------------------------

Some road sector is there.

--------------------------------------------------------------------------------

Bhavik Shah;B&K Securities Limited;Equity Research Analyst, [117]

--------------------------------------------------------------------------------

Okay. Sir, the road sector would be not added, sir. Correct?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [118]

--------------------------------------------------------------------------------

Infrastructure is -- IL&FS -- yes, yes, IL&FS will be there, one of the SPVs.

--------------------------------------------------------------------------------

Unidentified Company Representative, [119]

--------------------------------------------------------------------------------

IL&FS.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [120]

--------------------------------------------------------------------------------

SPV.

--------------------------------------------------------------------------------

Operator [121]

--------------------------------------------------------------------------------

The next question is a follow-up from the line of Ashok Ajmera from Ajcon Global Services.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [122]

--------------------------------------------------------------------------------

Yes, yes. So I thought I will not be so lucky to get the chance again. So -- but anyway, I think my number came very fast. So this risk-weighted assets of INR 2,99,492 crores, can you throw some light on this? I mean what is the composition of this?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [123]

--------------------------------------------------------------------------------

Composition means you wanted to understand the rating-wise because...

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [124]

--------------------------------------------------------------------------------

Yes. Faster -- I mean if rating-wise, given -- because you see you said that you are rated, has gone up to 58%, BBB has gone down 15% to 9% and below that has gone down to 13%. So now in the light of the new composition of this, what will be the composition of this risk-weighted of INR 299,000 crores? On a -- I mean because you see, the rating these days are, as we all know, is not -- one cannot rely only on rating. Suddenly, the rating of the [1 day] account or the [Delhi] account also goes to D or maybe DDD. So what is the kind of composition of this INR 2,99,492 from the risk point of view since they are all risk-weighted assets?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [125]

--------------------------------------------------------------------------------

Composition means it derives from the rating only primarily. And then to further look at that, is it that the industry you're looking at or...

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [126]

--------------------------------------------------------------------------------

Yes, industry-wise, so that we can have some -- like we can derive or we can analyze it that how far it will damage.

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [127]

--------------------------------------------------------------------------------

Okay. If you want to look at that, for the credit risk side of it, there this is coming to INR 2,49,000 for the credit risk side of it. And out of this credit risk side of it also, if you're looking at advances side of it, around INR 30,000 crores is of government guaranteed is that.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [128]

--------------------------------------------------------------------------------

Yes, yes. The government guaranteed is there.

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [129]

--------------------------------------------------------------------------------

Around INR 30,000 crores. I mean what else can you -- look at it (inaudible) INR 15,000 crores is the market risk.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [130]

--------------------------------------------------------------------------------

INR 15,000 crores is the market risk. I mean what is that comprising of?

--------------------------------------------------------------------------------

Unidentified Company Representative, [131]

--------------------------------------------------------------------------------

Credit portfolio.

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [132]

--------------------------------------------------------------------------------

It's the treasury mark to market risk in the portfolio.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [133]

--------------------------------------------------------------------------------

So sir, treasury. Now with this interest rate scenario, I mean, we have a rate today that SBI has suddenly reduced the sizable interest rate. So don’t you think that a lot of gains are expected in the coming quarters from the treasury front?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [134]

--------------------------------------------------------------------------------

A lot of what?

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [135]

--------------------------------------------------------------------------------

Gain, gain, profit?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [136]

--------------------------------------------------------------------------------

Yes. Yes. We expect to have a gain of around INR 200 crores in the coming quarter.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [137]

--------------------------------------------------------------------------------

As against this quarter off?

--------------------------------------------------------------------------------

Unidentified Company Representative, [138]

--------------------------------------------------------------------------------

If I could remember, INR 200-odd crores in Q1.

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [139]

--------------------------------------------------------------------------------

Yes. Q1 also, we made around INR 200-odd crores.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [140]

--------------------------------------------------------------------------------

Same will be there in the next quarter also?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [141]

--------------------------------------------------------------------------------

Yes. Yes.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [142]

--------------------------------------------------------------------------------

And sir, is this notes to the account, the Note #7, you said that the consolidated unaudited financial results also include the group shares of net loss after tax of INR 91.45 crores for the quarter ended 30th June 2019. So on those -- in respect of those fixed associates. So number one, it has been taken that a hit in the profit and loss account?

--------------------------------------------------------------------------------

Unidentified Company Representative, [143]

--------------------------------------------------------------------------------

The consolidated balance sheet, we have taken a hit.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [144]

--------------------------------------------------------------------------------

And whether -- I mean what are -- which are those associates which are giving these losses?

--------------------------------------------------------------------------------

Unidentified Company Representative, [145]

--------------------------------------------------------------------------------

Actually, there has been amalgamation of 3 RRBs in [MSME's] stead. So 2 RRBs have come to our forts, and 1 RRB we have transferred to State Bank of India. So the bank, they have come to us. They have observed loss of -- overall, that is the basic hit that we have taken.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [146]

--------------------------------------------------------------------------------

This is actually -- is it the same for RRB only? Or because the other note also...

--------------------------------------------------------------------------------

Unidentified Company Representative, [147]

--------------------------------------------------------------------------------

Associates are also there.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [148]

--------------------------------------------------------------------------------

Pardon?

--------------------------------------------------------------------------------

Unidentified Company Representative, [149]

--------------------------------------------------------------------------------

Some associates are also there.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [150]

--------------------------------------------------------------------------------

Associates are also. Because these are -- basically, this INR 91.45 crores is basically the associates because...

--------------------------------------------------------------------------------

Unidentified Company Representative, [151]

--------------------------------------------------------------------------------

Yes. RRB is a group of associates, not subsidiaries. Those are all case associates because they have 35% stake, not 51%. And of course, we have another 2, 3 domestic and international associates on [front]. So that is the total figure of all this.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [152]

--------------------------------------------------------------------------------

And sir, can I -- coming back again to my question of the credit, I mean, a little more since I got the time. I mean what kind of -- I mean, opportunities you are looking, in which areas for this credit growth of almost about INR 35,000 crores in the remaining 3 quarters? How do you see the composition between the corporates or MSME or Retail or this thing? What are your plans? You must have definitely worked out something on this.

--------------------------------------------------------------------------------

Unidentified Company Representative, [153]

--------------------------------------------------------------------------------

It is -- as of now, the ratio of corporate to RAM is about 51% to 49%. So by this year-end, we want to make 55% as the RAM sector then, corporate will be 45%. So it will be a good mix of both corporate and RAM segments.

And within the RAM segments, Retail will continue to grow, and it has been. We will focus more on good-rated quality SME accounts. And for that, we have enhanced the strength of our centralized hubs, SME city centers. We are also considerably now moving towards acquiring new assets and did -- in a typical blue blood -- what they call it? Addition. So we want to take up good-quality assets so that our group also will qualitatively improve. There are plenty of such accounts. We have activated our top 300 prime corporate branches who will be driving this.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [154]

--------------------------------------------------------------------------------

That's what you said. No, that's a very good move, but I would -- I mean, with my limited, whatever the knowledge and experience of dealing with the bank is that I think the whole credit process also needs be a little bit strengthened and streamlined because experience-wise, it goes through many, many, many, checks and balances, which are -- many of them can be avoided. I mean in the whole exercise at the branch level, again the repeated exercise at the regional level, again it will be repeated at zonal level, and then we finally, it go to the sanctioning authority. There also, there are 3 levels. I think something can be done on this to give the justice also to the people -- to the especially MSME.

--------------------------------------------------------------------------------

Unidentified Company Representative, [155]

--------------------------------------------------------------------------------

You're absolutely right, sir. You're absolutely -- we have started moving in that direction. So for example, if you take this MSME 59 minutes loan, which is online, so digital content and loan processing has increased. And still, there is a huge upside there.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [156]

--------------------------------------------------------------------------------

You gone for some higher limit for that? Just like some other banks we said INR 5 crores, we -- [MSME]

--------------------------------------------------------------------------------

Unidentified Company Representative, [157]

--------------------------------------------------------------------------------

We are in the process. We are in the testing stage. Maybe it's a matter of a few days only. So we are trying to improve it to INR 5 crores. And there is lot of traction happening there. We sanctioned about INR 1,500 crores so far in [principal]. And the final sanction has been about to the tune of INR 1,200 crores. Similarly, Retail also, our -- we are ready to go live. Once that happens, I think what you have mentioned, the concerns, those concerns will be, by and large, addressed.

--------------------------------------------------------------------------------

Operator [158]

--------------------------------------------------------------------------------

The next question is from the line of Mahrukh Adajania from IDFC.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [159]

--------------------------------------------------------------------------------

Sir, I just missed the discussion on your exposure to the ADAG group. So what will be your total exposure to the ADAG group? And how much of it is already NPL?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [160]

--------------------------------------------------------------------------------

Around INR 2,000 crores is the exposure, and we have made a provision of around INR 850 crores in this.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [161]

--------------------------------------------------------------------------------

Sir, INR 2,000 crores is entire -- all of it is NPL, is it?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [162]

--------------------------------------------------------------------------------

Except INR 700 crores is standard and rest is NPL.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [163]

--------------------------------------------------------------------------------

So -- and your INR 700 crores is from the NBFC?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [164]

--------------------------------------------------------------------------------

NBFC.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [165]

--------------------------------------------------------------------------------

That is standard. Otherwise, that is NPL?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [166]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [167]

--------------------------------------------------------------------------------

And rest that is NPA is all power, road or what is it?

--------------------------------------------------------------------------------

Unidentified Company Representative, [168]

--------------------------------------------------------------------------------

Telecom, road. Telecom.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [169]

--------------------------------------------------------------------------------

Telecom.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [170]

--------------------------------------------------------------------------------

Telecom and road. Okay. And do you have any exposure to power, Reliance Power?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [171]

--------------------------------------------------------------------------------

No, we don’t have.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [172]

--------------------------------------------------------------------------------

Okay. Got it, sir. Got it. And sir, with your government-backed airline, it's start of SME 2, right? Not SME 1?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [173]

--------------------------------------------------------------------------------

SME 2.

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [174]

--------------------------------------------------------------------------------

Yes, it's SME 2.

--------------------------------------------------------------------------------

Operator [175]

--------------------------------------------------------------------------------

The next question is from the line of Harsh Agrawal from Infina Finance.

--------------------------------------------------------------------------------

Harshvardhan Agrawal, Infina Finance Private Limited - Investment Analyst [176]

--------------------------------------------------------------------------------

Just wanted to understand this exposure of Dewan that we have and the ADAG group, NBFC that we just discussed. Is it an SME account for us or they are [SMA-0] account for us?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [177]

--------------------------------------------------------------------------------

Which one?

--------------------------------------------------------------------------------

Harshvardhan Agrawal, Infina Finance Private Limited - Investment Analyst [178]

--------------------------------------------------------------------------------

The Dewan account and...

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [179]

--------------------------------------------------------------------------------

Yes. DHFL is SME 1 account.

--------------------------------------------------------------------------------

Harshvardhan Agrawal, Infina Finance Private Limited - Investment Analyst [180]

--------------------------------------------------------------------------------

So just as per your last con call with the Dewan, exposure was INR 4,000 crores, but our SME 1 amount is much lesser than that.

--------------------------------------------------------------------------------

Unidentified Company Representative, [181]

--------------------------------------------------------------------------------

(inaudible)

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [182]

--------------------------------------------------------------------------------

[SMA-0] then (inaudible). Okay. When we entered the ICA, it was at SMA-0 .

--------------------------------------------------------------------------------

Harshvardhan Agrawal, Infina Finance Private Limited - Investment Analyst [183]

--------------------------------------------------------------------------------

So we are saying as on June 30, it was [SMA-0]

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [184]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Harshvardhan Agrawal, Infina Finance Private Limited - Investment Analyst [185]

--------------------------------------------------------------------------------

Okay. And sir, what about the ADAG-NBFC INR 700 crores amount that we just discussed?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [186]

--------------------------------------------------------------------------------

ADAG one is in [SMA-0], and one is in SME 1.

--------------------------------------------------------------------------------

Harshvardhan Agrawal, Infina Finance Private Limited - Investment Analyst [187]

--------------------------------------------------------------------------------

What is the amount in SME 1, if you can share that?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [188]

--------------------------------------------------------------------------------

Around [EUR 430 million].

--------------------------------------------------------------------------------

Harshvardhan Agrawal, Infina Finance Private Limited - Investment Analyst [189]

--------------------------------------------------------------------------------

Sorry, INR 400 crores?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [190]

--------------------------------------------------------------------------------

4-3-0.

--------------------------------------------------------------------------------

Operator [191]

--------------------------------------------------------------------------------

(Operator Instructions) As there are no further questions from the participants -- I'm sorry about that sir, we just have 2 questions which have come up now, you'd like to take those?

--------------------------------------------------------------------------------

Unidentified Company Representative, [192]

--------------------------------------------------------------------------------

Yes, please.

--------------------------------------------------------------------------------

Operator [193]

--------------------------------------------------------------------------------

Okay, sure. The next question is from the line of Arjun Tandon from Matsya Capital.

--------------------------------------------------------------------------------

Arjun Tandon;Matsya Capital;Analyst, [194]

--------------------------------------------------------------------------------

Just a question on the NCLT resolution. So for example, in the Essar Steel case, what is the -- basically, the date of hearing? And what is the final hurdle for the resolution to be passed? And how much time will it take for the recoveries to hit your balance sheet?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [195]

--------------------------------------------------------------------------------

2nd August is the date of hearing.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [196]

--------------------------------------------------------------------------------

2nd or 3rd August is the date. And, yes. It is in the last stage, and we are expecting an outcome, a binder, in this hearing.

--------------------------------------------------------------------------------

Arjun Tandon;Matsya Capital;Analyst, [197]

--------------------------------------------------------------------------------

And this is expected to be a binding outcome?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [198]

--------------------------------------------------------------------------------

Expected to be so.

--------------------------------------------------------------------------------

Arjun Tandon;Matsya Capital;Analyst, [199]

--------------------------------------------------------------------------------

Okay. Okay. And sir, what about the other accounts? I mean where you said there are 6 to 7 accounts that are in the process. So what kind of dates, if you can help us out with?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [200]

--------------------------------------------------------------------------------

These are -- we are expecting in Q2.

--------------------------------------------------------------------------------

Arjun Tandon;Matsya Capital;Analyst, [201]

--------------------------------------------------------------------------------

Okay. But so all the decisions are like binding decisions are expected in Q2?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [202]

--------------------------------------------------------------------------------

Yes. Unfortunately, yes.

--------------------------------------------------------------------------------

Operator [203]

--------------------------------------------------------------------------------

The next question is from the line of [Alan Dhamaal] from Emkay Global.

--------------------------------------------------------------------------------

Unidentified Analyst, [204]

--------------------------------------------------------------------------------

Sir, I wanted to understand what is our exposure to the IndiaBulls Group? Number one. And apart from that, there are a lot of East West accounts where there has been some stress which we have seen in case of many other banks, likes of...

--------------------------------------------------------------------------------

Operator [205]

--------------------------------------------------------------------------------

Excuse me, this is the operator. [Mr. Dhamaal], your voice is fluctuating a bit. We are unable to hear you.

--------------------------------------------------------------------------------

Unidentified Analyst, [206]

--------------------------------------------------------------------------------

Sure. Can you hear me now?

--------------------------------------------------------------------------------

Operator [207]

--------------------------------------------------------------------------------

Better, sir.

--------------------------------------------------------------------------------

Unidentified Analyst, [208]

--------------------------------------------------------------------------------

Yes. Sir, can you please tell me the exposures that we have basically to the IndiaBulls Group? Number one. And number two is that, what is our exposure to the East West Group, particularly now in stress like Emami, McNally Bharat, McLeod Russel? And whether we have recognized all the accounts as NPA in this quarter?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [209]

--------------------------------------------------------------------------------

Yes. Regarding the IndiaBulls, we have an exposure of around INR 3,500 crores.

--------------------------------------------------------------------------------

Unidentified Analyst, [210]

--------------------------------------------------------------------------------

Okay. That is the group level, right, sir?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [211]

--------------------------------------------------------------------------------

Yes, group level.

--------------------------------------------------------------------------------

Unidentified Analyst, [212]

--------------------------------------------------------------------------------

So what is it, sir, that we have particularly to IndiaBulls Housing?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [213]

--------------------------------------------------------------------------------

We have the IndiaBulls Housing only.

--------------------------------------------------------------------------------

Unidentified Analyst, [214]

--------------------------------------------------------------------------------

Okay. Okay.

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [215]

--------------------------------------------------------------------------------

And towards the East side of it, we have only McNally Bharat, which is as I understand is...

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [216]

--------------------------------------------------------------------------------

NPA already.

--------------------------------------------------------------------------------

Unidentified Analyst, [217]

--------------------------------------------------------------------------------

In this quarter itself?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [218]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Unidentified Analyst, [219]

--------------------------------------------------------------------------------

Great, great. And sir, apart from that, do we have exposure to any other new stress coming in primarily from the -- very particularly in terms of -- sir today, there was this news about CCD now running into problems. Sir, do we have exposure over there? Then there are these new power accounts, which possibly could come under stress. So any concerns over there?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [220]

--------------------------------------------------------------------------------

We have a small exposure under CCD. We don’t find it as a stressed one. Well, it's around INR 20 crores we have.

--------------------------------------------------------------------------------

Unidentified Analyst, [221]

--------------------------------------------------------------------------------

Okay. And sir anything on the power front?

--------------------------------------------------------------------------------

Chaitanya Gayatri Chintapalli, Bank of India Limited - Executive Director [222]

--------------------------------------------------------------------------------

No fresh stress is coming in.

--------------------------------------------------------------------------------

Unidentified Analyst, [223]

--------------------------------------------------------------------------------

Nothing that you see particularly from the Reliance Group or any other entity as such?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [224]

--------------------------------------------------------------------------------

Reliance Power, we don’t have.

--------------------------------------------------------------------------------

Operator [225]

--------------------------------------------------------------------------------

The next question is from the line of Ashok Ajmera from Ajcon Global.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [226]

--------------------------------------------------------------------------------

I think I'm getting upon -- anyway, since I got this third opportunity, I would just like to know the total number of -- I mean, our total amount in the NCLT, including that NCLT 1 and, I mean, the risk 1 and 2? How much claims the bank has filed in NCLT? If not, may not be a number but in value. And what are the prospects, I mean, the percentage terms of the recovery from those accounts?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [227]

--------------------------------------------------------------------------------

INR 31,000 crores is the total claim filed by us and other banks where we are conversion numbers. INR 31,000 crores.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [228]

--------------------------------------------------------------------------------

No, mean, sir, what share is INR 31,000 crores?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [229]

--------------------------------------------------------------------------------

Yes, yes.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [230]

--------------------------------------------------------------------------------

Yes. Okay.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [231]

--------------------------------------------------------------------------------

Against this almost 100% provision in there.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [232]

--------------------------------------------------------------------------------

Okay. So, so --

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [233]

--------------------------------------------------------------------------------

And we have -- we expect to receive in Q2, a little bit lower around INR 2,400 crores out of 6 accounts out of this INR 31,000 crores.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [234]

--------------------------------------------------------------------------------

Yes. But the 6 accounts that those -- maybe around -- how much in INR 19,000 crores -- means out of remaining INR 20,000 crores...

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [235]

--------------------------------------------------------------------------------

These 6 accounts outstanding is around INR 3,700 crores.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [236]

--------------------------------------------------------------------------------

Yes, it is small.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [237]

--------------------------------------------------------------------------------

In fact that we are expecting around INR 2,000 crores to INR 2,400 crores.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [238]

--------------------------------------------------------------------------------

So the remaining INR 28,000 crores, some -- ballpark, some benchmark, some idea of recovery?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [239]

--------------------------------------------------------------------------------

These are all in various stages because, see, around 300 accounts are involved, these are all in various stages of proceedings. So account-wise, it will be difficult to tell but...

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [240]

--------------------------------------------------------------------------------

But -- I just -- something like maybe 20%, 18%, 22% approximately, maybe the recovery chances for the other account or maybe 30%. Something must have definitely been analyzed or worked upon?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [241]

--------------------------------------------------------------------------------

You see, for example, in this Q2, we expect around 10%.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [242]

--------------------------------------------------------------------------------

From the remaining?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [243]

--------------------------------------------------------------------------------

No, in Q2, what I...

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [244]

--------------------------------------------------------------------------------

That is including that INR 2,400 crores.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [245]

--------------------------------------------------------------------------------

That is 10%, isn't it? I suppose maybe in Q3 and Q4 that is the expectation. But they are all in very different stages of proceedings. We will not be able to predict the play.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [246]

--------------------------------------------------------------------------------

Okay. No, no, no. No problem. No problem. Maybe we have more clarity after the next quarter. Sir, in this breakup of standard restructured advances, in aviation, the total is INR 3,614 crores. So these 2 accounts, we have seen, I mean Jet and Air India, it is -- I mean, and the restructured Jet and Air India is not included, isn't it?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [247]

--------------------------------------------------------------------------------

No, no. This is only the Air India.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [248]

--------------------------------------------------------------------------------

This entire INR 3,614 crores?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [249]

--------------------------------------------------------------------------------

Jet is already NPA. It is not standard.

--------------------------------------------------------------------------------

Ashok Kumar Ajmera, Ajcon Global Services Limited - Executive Chairman, CEO & MD [250]

--------------------------------------------------------------------------------

Okay, okay. Yes, yes. So this entire INR 3,614 crores is Air India?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [251]

--------------------------------------------------------------------------------

Air India.

--------------------------------------------------------------------------------

Operator [252]

--------------------------------------------------------------------------------

The next question is from (inaudible) the line of the from [Athena] Investments.

--------------------------------------------------------------------------------

Unidentified Analyst, [253]

--------------------------------------------------------------------------------

I have actually a broader question for the whole banking industry. The NPA slippage, new slippage continues to be 4% plus, and the NIMs are around 2.5%. So what is a reasonable level of slippage which the PSU banks can operate profitably?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [254]

--------------------------------------------------------------------------------

It should be around 1.5% down.

--------------------------------------------------------------------------------

Unidentified Analyst, [255]

--------------------------------------------------------------------------------

So when do we expect that this 4% will become 1.5%? How long before it normalizes? Because now we are lending to corporates is not growing very fast, and most of the corporate NPAs are recognized. But still in the current quarter, you have 4% kind of NPA, not only Bank of India but other banks also. So it seems to be a general problem of the industry itself for the banking industry and the economy. So when do we think that this would come down to around 1%, 1.5%, where the banks start becoming profitable?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [256]

--------------------------------------------------------------------------------

I think in this INR 3,600 crores, only 30% is in the corporate sector. Around another 30% is in the agriculture, where we have lodged our claim and the recovery will be coming. Only it is taking time because the government has to make the payment. So to say that it can -- it will come under control only for the certain extraneous factors like agriculture, RAM, debt waiver scheme because of which, it is a little bit down -- elevated. We are working on this, and the credit monitoring and various measures which we have taken up will contain the retail and MSME in a big way. So we hope to bring it below 2% down.

--------------------------------------------------------------------------------

Unidentified Analyst, [257]

--------------------------------------------------------------------------------

For the current year?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [258]

--------------------------------------------------------------------------------

In the current year, at least that will be our aim, certainly.

--------------------------------------------------------------------------------

Unidentified Analyst, [259]

--------------------------------------------------------------------------------

You have already done 1%, right? In the first quarter itself. So unless this rolls back, then, obviously, it should come down.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [260]

--------------------------------------------------------------------------------

Yes. There...

--------------------------------------------------------------------------------

Unidentified Analyst, [261]

--------------------------------------------------------------------------------

Then I'm asking not -- again, as I said, I'm not asking particularly with respect to your bank because I'm just seeing as a general trend whatever other banks have reported, like Canara reported results, Bank of Baroda reported. I mean everybody has one or the other issue or a reason for NPA to be high, and every quarter, the reason is different. Either a specific larger home slips or it is due to agriculture or sometimes in some of the banks, it's due to MSME. So just the system as a whole, when do we think this will come to around 1.5%? Because that's when actually banks will become profitable and the need for recapitalization from government will not be there.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [262]

--------------------------------------------------------------------------------

The other way to look is, as you said, we have to improve on our recovery. And that there, many things are helping. At least, the recovery systems are getting streamlined and more clarity is coming even in NCLT with...

--------------------------------------------------------------------------------

Unidentified Analyst, [263]

--------------------------------------------------------------------------------

Recovery will help with your old NPAs. I think the fresh slippage, if it is 4%, and then you continue to work on recovery on that. So my focus is on the fresh slippage number. That itself is not reducing.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [264]

--------------------------------------------------------------------------------

You see, one is we have to improve on the asset quality. That, we are working on that by focusing on...

--------------------------------------------------------------------------------

Unidentified Analyst, [265]

--------------------------------------------------------------------------------

Retail and MSME, right?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [266]

--------------------------------------------------------------------------------

Not only Retail, and even here, focusing more on specific offices or branches. For example, in MSME, 300 branches we have identified out of the 5,100-odd branches. So by providing proper manpower, training and facilitating measures, that quality of the asset is going to improve and further the -- the vertical which has created up to the zonal office level. They are all equipped to now to monitor including analyzing the transactions of above-INR 1 crores accounts. For example, above INR 5 crores, we have around 2,000 accounts. It is monitored from H1 level also. Then we have introduced a borrower health profile mechanism, where online alerts are generated as per the RBI guidelines. We are also going to procure a software tech-based credit monitoring tool. These are all the things which will improve our credit monitoring and early warning signals.

In smaller accounts, Retail, Agriculture and the MSME, we are increasing our route for work at the branch level because that is the best way to monitor. Unless -- unlike earlier, we were starting to following up after 30 days or 60 days. Now the follow-up starts from Day 1 of the overview. And the most of the cases, we are going for linking to the income-generating accounts so that the recovery happens automatically. So there -- many such measures are being initiated...

--------------------------------------------------------------------------------

Unidentified Analyst, [267]

--------------------------------------------------------------------------------

So I mean, let me ask you this. Is this more of a problem of the way banks function? Or is this an economy-related issue that the NPAs are high? Or is it in equal measure contributed by both?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [268]

--------------------------------------------------------------------------------

It is, I should say, both are contributing in different proportions. The economy is also stressed. And at the same time, the way -- because we have gone for retail and RAM aggressively, and at the same time, we have to strengthen our monitoring system accordingly. That is happening now. And the corporate books or whatever the hit we have taken, we have, and now it is tapering. And with the strengthening of the credit monitoring system from H1 level down the line and making certain automation in this process, we will be able to control, contain the other corporate slippages further in the coming days. It is a passing phase, I should say. In this current financial year, a lot of improvements we expect.

--------------------------------------------------------------------------------

Unidentified Analyst, [269]

--------------------------------------------------------------------------------

So will you be below 3% for the whole year? I mean what confidence can you say what percentage will you be below in terms of...

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [270]

--------------------------------------------------------------------------------

As I said, we expect around INR 12,000 crores slippages. So that is the indication.

--------------------------------------------------------------------------------

Unidentified Analyst, [271]

--------------------------------------------------------------------------------

So that's around -- that's more than 3%, 3.5%.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [272]

--------------------------------------------------------------------------------

Little, little. Yes.

--------------------------------------------------------------------------------

Unidentified Analyst, [273]

--------------------------------------------------------------------------------

Okay. And next year, do you think it will come down?

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [274]

--------------------------------------------------------------------------------

It should certainly because to bring it below, as you said, to bring it below 2% that we have to aim to sustain.

--------------------------------------------------------------------------------

Operator [275]

--------------------------------------------------------------------------------

Ladies and gentlemen, this was the last question for today. I now hand the conference over to Shri N. Damodharan, Executive Director, for his closing comments. Over to you, sir.

--------------------------------------------------------------------------------

Neelam Damodharan, Bank of India Limited - Executive Director [276]

--------------------------------------------------------------------------------

As I said initially, this operating profit and the net interest income and other income as well as reduction in operating expenses have been sustained for the second quarter, and there has been no exceptional one-off this time unlike earlier.

So we will be focusing on the asset quality, improving the asset quality, spreading the risk and also focusing on credit monitoring and the recovery measures in a big way. So as to reduce the gross NPA to around INR 56,000 crores and the profit level to be sustained and improved upon from the Q1 position. In this, we are making, and we have already made structural changes in the organization and also focus has been shifted to key areas, which will be contributing towards the profit and the asset quality improvement. These 2 will be the focus. And all the measures are attuned to this in a coordinated way. We expect and we hope that better results will be from next quarter onwards -- current quarter -- Q2 onwards.

Thank you very much for joining us and listening, hearing to us very patiently. Thank you. Thanks a lot.

--------------------------------------------------------------------------------

Operator [277]

--------------------------------------------------------------------------------

Thank you very much, sir. Ladies and gentlemen, on behalf of Bank of India, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.