BoI to revise NIM to 2.9% from 3%, to sell NPAs worth Rs 900 cr to ARCs: Media Report

BoI to revise NIM to 2.9% from 3%, to sell NPAs worth Rs 900 cr to ARCs: Media R
Prolonged sluggishness in the economy has forced Bank of India to lower its margin expectation for the current fiscal to 2.90 per cent from 3 per cent earlier, a top bank official said according to a PTI news report.

"The earlier estimate for NIM on the domestic side was at 3 per cent, but the turnaround which we thought, has not really happened. So, we are compelled to revise that to 2.90 per cent," bank's Chairperson and Managing Director Vijayalaxmi Iyer told reporters.

However, the bank expects net interest margins on the international side improving to 1.20 per cent by March-end, while the combined NIM is likely to at 2.72 per cent.

The state-run bank is also examining to sell around Rs 900 crore worth of non-performing assets (NPAs) to asset reconstruction companies in the current quarter.

"We have been doing it (sale of NPAs) in last two quarters, and we are examining at it even in this quarter also. We have to crystallise on the may be Rs 800-900 crore in Q4," Iyer said.

She said the bank had auctioned Rs 2,000 crore of NPAs in Q2 and Q3, but only about Rs 627 crore was taken of from the gross NPA level. Iyer added the bank was not likely to take any hit by selling the NPAs to ARCs.

"In the first two quarters when we have sold NPAs, we have sold them above the net book value and have not taken any haircut. We have got the excess provisioning which has been put aside and we can use it if are are compel to sell them less than the book value in this quarter," Iyer said.

Dion Global Solutions Ltd.

Story first published: Tuesday, March 25, 2014, 9:21 [IST]
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