It was a memorable quarter and a year for you as your bank is back in the black for FY21 and you have exited the PCA framework as well. So what is the outlook now? Can we expect this trajectory to continue?
Based on the transformation strategy we adopted two-and-a-half years ago, we have been able to attend to all the issues. We have now reached a stage where we will be able to sustain profits and improve performance. Our ROA was 0.46% and now we have a target of 0.65 to 0.70%.
Your Q4 GNPAs were lower than the proforma GNPA. What led to this performance and what has been your slippages and recoveries for FY21?
We have been able to keep slippages under control. Despite Covid and delays in NCLT hearings, we were able to make some good recoveries. Total recoveries during the full year will be around Rs 4,500-5,000 crore. We have also been able to upgrade one big account of around Rs 700 crore. So all those things helped us in reducing our GNPAs and net NPAs. We have been quite aggressive in making proactive provisions. There are uncertainties related to the second wave of Covid but we are cautious and do not expect any major reverse surprises. Things will be under control.
What can you tell us about the loan book growth for FY22?
So far, we were consolidating our balance sheet and so the growth was not there. But now we are our of the PCA framework and our capital adequacy ratio is quite comfortable, so we will grow in a very calibrated manner. Our focus will be on mid corporates, corporate advances with manufacturing activities and some highly-rated companies. In SRA, our retail assets will grow by 10-12% and 8-10% in corporates. I am expecting an overall growth of 10%. Our liquidity and capital position is quite comfortable.
Do you have sufficient growth capital or would you need to raise funds in FY22?
Our capital adequacy ratio is at 15.59%. The minimum regulatory requirement is 11.5%, but still we will try to not come below 13.5%. With that capital, we will be able to grow more than 12-13%. There is sufficient growth capital available.
Our provision coverage ratio is more than 95% and whatever recoveries we make that will help us in improving the reversal of provisions. So the internal accruals will also be there to help. This year at least we do not need any capital. But at the same time, if the need be we will be open to raising capital.
