Highlights

The bank has witnessed a very good start for FY2023 with good quarter in Q1FY2023 showing improvement on various parameters. The performance of the bank is well on planned strategy.

The asset quality of the bank continues to be strong.

The bank has exhibited substantial pick up in credit growth in Q1FY23 with meaningful growth on yoy as well as qoq basis.

The liability franchise of the bank is strong having advantage for showing growth ahead.

There is no one off in earning for Q1FY2022. However, the rise in interest rates impacted treasury income of the bank, while the employee cost was low on advance provisioning earlier.

The bank has improved RoA to 1.1% showing consistent improvement for last three quarters, while the bank expects ROA to continue trending up and achieve RoA of 1.1-1.15 by Q4FY23 and improve further to 1.25% by Q4FY2024.

The bank expects the credit growth at mid-teen to high teens for FY2023.

The core fee income has remained on stable trajectory.

As per the bank, the policy rate hike has transmitted to bank lending rates with all external benchmark linked loan book getting repriced.

The bank has raised saving deposit rate by 25 bps to 2.75% in Q1FY2023 which matches with the saving deposit rate of SBI. The bank has also raised its term deposit rates.

The credit growth has been all round, while the bank is showing improvement in market share. The bank outreach has improved. The credit market share was 1.2%, while the incremental market share is 2%.

As per the bank, the external benchmark linked loan book stands at 47.9% of overall loan book, fixed rate loan book at 26% and MCLR linked at 17%.

The fresh slippages of loans were elevated at Rs 444 crore in Q1FY2023, as the retail and business banking book showed higher slippage on account of slippages from restructured loan book.

The bank expected the slippages in the retail loan book to remain elevated at Rs 200 crore for next two quarters up from pre-covid level of Rs 140-150 crore per quarter.

The bank had guided at 25% slippage in retail restructured loan book last year.

There is no slippages from ELCGS loan book which stands at Rs 4000 crore.

There is no significant MTM provision as AFS and HFT investment book of the bank is very thin. However, the trading income was impacted due to lack of opportunities.

The bank does not have capital raising plans, while it will consider capital raising when CRAR dips below 13.0-13.5%

The CRAR of the bank was impacted due high risk weight for certain corporate loans up from 70% to 100%.

The bank is targeting NIM of 3.25-3.27% for FY2023 and expects 5 bps NIM improvement from current level.

The credit deposit ratio stands at 82%, while bank would be comfortable if credit-deposit ratio rise upto 84-85%.

The bank does not have any priority sector lending (PSL) shortfall.

The written off account loan book stands at Rs 3000 crore

As per the bank, the asset quality of the corporate book is holding well, while commercial banking book also does not have much stress.

The bank expects slippages Rs 1800 crore slippage in FY23.

The bank expects full year employee cost at Rs 2500 crore in FY2023.

The slippages from restructured loan book were at Rs 110 crore in Q1FY2023.

The focus on the bank is on digitalization, while it plans to add 55 branches in FY23 and 200-250 branches in next three years. The bank is accepting small branch model for adding new branches.

The bank has only 1 loss making branch.

The bank is adding 12-14 thousand liability accounts on daily basis.

The cost of deposits declined 8 bps in Q1FY20223, as high cost and long tenure deposits matured in Q1FY2023. The bank expects the impact of hike in saving rate and terms deposit rate to reflect on cost of deposits in Q2FY2023.

The bank has witnessed increase in cost of saving deposits by 12 bps in Q1FY2023.

The retail deposits stands at 92% of total deposits.

The bank expects credit cost at 50 bps for FY2023.