Highlights:

The bank is progressing very well from March 2020, when it was under moratorium, and it has also seen significant improvement out of the impact of the pandemic in the entire economic cycle. There is an improvement in terms of fresh business, new business, and also in terms of collection.

The economy would be absolutely back to the pre-COVID levels, if the current trend continues and there are no negative surprises on account of pandemic.

The bank is seeing a significant improvement on all the fronts. It is almost near to the corresponding quarter of the last financial year. In some of the aspects, bank is better than the corresponding period of last financial year.

On the liquidity side, also, the bank is getting very good support from customers. The bank has also seen a really significant growth in CASA deposits, which is 20% for the first 6 months.

Because of good growth in deposits, CD ratio has declined from 164% end March 2020 to 123% end September 2020. The bank has been able to repay the special liquidity facility of Rs 50000 crore from Reserve Bank of India well before the due date.

The bank has opened 1.5 lakh CASA accounts in Q2FY2020, which is more than 1.4 lakh opened during January to March quarter.

The bank continues to have a good control on the cost side. The bank has already engaged a global consulting firm to take care of the cost part. In last 5 quarters, first time expenses ratio has declined below 50%. The bank will continue to improve expense ratio further to reach something around 45% by year end. The impact of the branch rationalization and ATM rationalization would also reflect in the next 6 months.

The bank has also made a significant provision related to COVID amounting to Rs 1918 crore, which is 1.15% of total advances. Bank expects that this provision would take care of any slippage or any restructuring of accounts in the third quarter.

The last quarter, the bank has also seen the credit rating upgrade from Moody's, CRISIL, India Ratings and ICRA.

The bank continues to be leader on of technology side with top position in UPI P2M transactions (37% market share) and top remitter bank on IMPS side. The bank has also launched new digital products.

The bank has also started delivering loans on the digital side. Initially, the bank is doing the personal loans and the car loans. But slowly and gradually, it would start delivering all retail products and the MSME Loan in Seconds.

The bank is already there on the WhatsApp Banking.

The bank is not much in corporate business this year, which has impacted the fee income. Still the bank is able to have better non-interest income.

The bank got a write-back of provisions of something around Rs 560 crore from the sale of bonds in one of the housing companies, which has been used to increase provisions on the investment side in one of the large conglomerates.

The provision coverage ratio on the investment side now has gone up to 71%.

PCR has improved from 75.1% to 75.7% end September 2020.

The loan book has grown by 1.5% qoq. There is a reduction in corporate book due to focus on derisking the portfolio. But on the retail side, bank has seen a disbursement of Rs 3764 crore as compared to just Rs 424 crore Q1FY2021 and even higher than Rs 3100 crore in Q2FY2020.

The bank is targeting to disbursements of Rs 5500-6000 crore on the retail side and Rs 3500-4000 crore on the MSME. So retail and MSME together, the bank is targeting to disbursements of Rs 10000 crore in Q3FY2021.

The account with standstill benefit stands at Rs 2391 crore end September 2020, which would have otherwise slipped in the absence of Supreme Court order.

At the same time, the overdue book for more than 60 days is Rs 4050 crore and overdue position of between 31 to 60 days is Rs 2621 crore. So overall, the total stressed book is something around Rs 9072 crore, of which the corporate is Rs 7500 crore, MSME is Rs 900 crore and retail is Rs 500 crore.

The collection efficiency for the retail segment pre-COVID was something around 97%, which stands at 89% in September 2020. On the SME side, pre-COVID was almost 94%, and now it is 83%.

On the wholesale banking on the corporate side, the collection efficiency is still lower with issues remaining on the real estate, hospitality, food processing side remaining.

As per the bank, if there are no negative surprises on the economic side, then the quality of loan book will further improve.

The bank expects Q3FY2021 would be better than the last quarter in terms of recoveries from the stressed assets.

With 20% of capital position, the bank expects not further capital raising.