Highlights

The bank has recorded steady performance in the quarter ended June 2021 despite challenging environment due to second covid wave

The bank is well placed for a reasonably good performance in FY2022.

The bank has launched a credit card business to begin with for the employees and existing customers.

The bank has been able to maintain stable collection efficiency, provision coverage ratio and asset quality in the quarter ended June 2021.

As many as 2000 employees of the bank were infected with covid-19 and the bank also lost life of some of its employees during the second covid wave.

The field activity was impacted during the quarter due to the second covid wave with restrictions on mobility.

Despite the restriction during the pandemic, the bank has built a retail loan book of Rs 2000 crore in the personal loan segment which is entirely digitally sourced from existing customers.

The credit card business is on hold due to MasterCard issue

The Asset quality is holding up well but there are some pockets of challenges. The bank has redoubled its efforts for collections.

Within the retail slippages, the home loan segment has contributed 50% of the slippages.

The bank has restructured gold loans amounting to Rs 225 crore, while classified Rs 50 crore of gold loans as NPAs in the quarter ended June 2021.

The restructuring of loans stood at Rs 850 crore for Q1FY2022. The bank expects further restructuring of Rs 400-450 crore of loan ahead.

The interest income reversals stood at Rs 65 crore for the quarter ended June 2021.

The bank expects fresh slippages of around Rs 1800 crore loans for FY2022, similar to the last two years.

The bank does not see any challenges in its corporate loan book.

The recoveries in written off accounts in Q1FY2022 on account of recovery from Kingfisher Account.

The cost incurred to buy priority sector lending certificates (PSLC) was Rs 35 crore for FY2021.

The gold loan book was stagnant for two months but now it has started picking up. The bank is focusing on the retail and business banking loan segment for loan growth.

There are early good signs for the restructured loan book and restructured loan book is faring well.

In the retail loan book, the restructured loans mainly comprise home loans and loan against property and most of the book is secured book and loss given default is low.

In the restructured loan book, against the demand of 14.5% the collection efficiency was healthy at 95%.

The bank expects net interest income growth to pick up ahead, driven by moderating interest income reversals, pickup in loan growth and higher share of high yielding loan assets.

The bank expects its net interest margin at 3.15-3.20% for FY2022.

The cost to Income ratio stood at 45% in the quarter ended June 2021, while it is expected to increase to 48% ahead.

The bank has added only twenty branches in the last five years, while it wants 1250 branches to feel the strength of 3000 branches through extensive use of technology.