[ad_1]
Excerpts edited:
Do you think that the three-way merger was the only solution for Dena Bank, because less capital infusion or less this merger, Dena Bank was struggling to survive?
This was not the case. The CRAR of our bank capital was higher than the required benchmark. At least CT-1 is there and the bank would certainly turn around from June 19th. Provisions up to 65% have already been made.
Would you say that the decision concerned only the Ministry of Finance?
This is not so. The government will take a call after studying all the advantages and disadvantages of any banking sector. And as far as Dena Bank is concerned, Dena Bank employees are also well placed because they will go to Bank of Baroda, an internationally recognized bank. The question had been under consideration for almost a year because when it was done, it was decided that some of the banks would be consolidated.
Do you have an idea of what the swap ratio could be?
This has not been decided yet as it will take time. First, we need to go to the board to get approval for that consolidation, and then it will be a short time before we meet and prices are decided.
Do you think the merger will go smoothly or do you feel resistance from employees or unions?
Naturally, there will be some resistance from employees, particularly unions. They will certainly resist because the question is a question of identity.
Could you tell me about the communication with the Department of Finance? Did they indicate that all existing Dena Bank employees would be absorbed or could there be layoffs at Dena Bank?
If you read yesterday the message from the secretary, Mr. Rajiv Kumar, as well as from the Honorable Minister of Finance, you have been told categorically that no employee will be inconvenienced or that there will be no loss of employment. . The department has also stated very categorically.
According to the latest figures reported, where is your Tier 1 capital?
It was 10.04 and level 1 was 8.04%.
What was your last reported NPA?
It was 11.04%.
Are there consortia lending to both BoB and yourself and, in a sense, it will simply facilitate the merging of the books?
With Bank of Baroda as the leader of the consortium, we have just four or five accounts, and that also on a very small scale.
What was the clarity of the role you will play in the new entity and would you be a member of the board?
This is not decided yet. All three banks together will be a large entity and the government will take a call.
When the merger of SBI's partners occurred, it had a cost for SBI and SBI had to make a lot of write-downs now even though banks follow a RBI guideline. Do you think that when BoB's book, Vijaya Banka and Dena Bank are merged, Dena Bank's NPA chart could change drastically because BoB and Dena Bank may not have followed the same practices?
Our provision coverage ratio is already 64-65%. So, most things have already been taken care of. Only 35% remain and, naturally, provisions must be made gradually according to the age of the NPA. Naturally, in such a process, Bank of Baroda will certainly have an advantage, Dena Bank having 41% of CASA while it has 34% and Vijaya Bank 25%. The new entity will have a good amount of CASA.
How long will this merge process last? Could you give us a schedule? What happens next?
Approval of all advice will be obtained in the next few days, perhaps a week or so. In fact, it should not take more than three to six months in total.
Your net APEs are about 11%. What are your total stressed assets and how many recoveries can be expected from stressed assets?
Our stressed assets, in particular those referred to NCLT, amount to Rs 3,900,000,000 and we expect a recovery of approximately 35 to 40%. We have already provisioned 60% in these accounts.
[ad_2]
Source link
