PFC Q4 FY17 concal:
Due to re-alignemnt with RBI norms - 59kcr of assets were downgraded.
Total impact on profit in Q4 = 3786 cr.
All 59kcr of assets were government/state owned - generational projects. All are being serviced with no dues as of 31st
23kcr downgraded to npa out of these 59kcr. The top 3 accounts out of these worth 18k cr would be upgraded to standard in
CY17 itself. All of these projects have been commissioned.
Recovery rate on these 59k cr projects = 100% (except 4cr - Meghalaya project).
58% of the restructured assets will reverse in fy18 as these projects have already been commissioned.
13% will commence in fy18.
10% will commence in fy19.
All these restructured assets are being service regularly and will be reversed to standard assets over a period of time.
All these projects have FSA's in place.
We do not see any stress in these 59kcr of assets and are likely to turn standard in the next 2-3 years.
In the track record of PFC, government projects have never been declared NPA except Sikkim (now standard) and Ratnagiri.
FY17: Decreased NPA's. 4 loan accounts of 920cr upgraded to standard category. 1 asset 442cr downgraded to NPA.
With RBI Impact: GNPA: 12.5% NNPA: 10.55%
Without RBI norms: GNPA: 3.01% (3.15% in FY16) NNPA: 1.68% (2.55% in FY16)
Balance restructured group (over and above the ones after RBI impact) = 19500cr.
Despite UDAY prepayment of 28400cr, loan asset growth was positive to the tune of 3%.
CAR at 19%. Tier 1 = 16%
Private sector projects outlook getting better. Coal linkages falling in place.
10.5% is the yield on the overall book.
See no impact on credit rating as the new restructured assets are all government owned and recovery rate is 100%.
Net-net my take: with all the upgradation slated to come through in FY18, PFC should be in a position to restore the
dividends back to 8 bucks or thereabouts.