Syndicate Bank hopes to recover about ₹1500 crore from Non-Performing Assets (NPAs) over the next three to six months, according to its Managing Director (MD) and Chief Executive Officer (CEO) Mrutyunjay Mahapatra.
Addressing a press conference held here on Saturday, he said that the bank will use a combination methods to recover bad loans.
It has created a team of 1500 staff to focus on recoveries in addition to eight special branches which took up the job and were reporting directly to the corporate office. The recovery is expected through both NCLT and non_NCLT segments.
As on September 2018, Syndicate Bank had 12.9 per cent and 6.8 per cent gross and net NPAs respectively. The NPAs in agricultural loans were also raising due to expectations of loan waivers, he added. The agri bad loans of banks are at 14 per cent.
Recovery of NPAs, coupled with higher focus on lending to retail and Micro, Small and Medium Enterprise (MSME) segments, will bring back the Karnataka - based bank to profitability by June, he claimed. “We are expecting break even by end of March and to turn profitable by June,’’ he added. The Net Interest Margin (NIM) is expected to be hovering in the range of 2.25 per cent to 2.5 per cent over next two quarters.
The state-owned bank had posted at net loss of ₹2825 crore in the half-year ended September 2018 compared to the net loss of ₹158 crore in the corresponding half-year of previous fiscal.
It will be raising equity of up to ₹500 crore by issuing stocks to its staff members under the Employee Stock Purchase (ESPP) scheme. The bank will issue 300 million shares to employees to raise the capital. “This is a largest initiative of this kind and will be completed between January - February,’’ Mahapatra said.
In October and December 2018, there was a capital infusion of ₹2360 crore.