The Net Interest Margins (NIMs) of the bank has improved to 3.07% in Q1FY2021 supporting growth in the Net Interest Income (NII) of the bank. The bank has substantially improved CASA deposits ratio to 32% end June 2020. Within the loan book, the bank raised the share of retail loans to 50%.

Asset quality improves: Asset quality of the bank improved sharply with the sharp decline in the net NPA ratio in Q1FY2021.

• Gross NPA has increased 8% on yoy basis to Rs 3655.59 crore, while Net NPA dipped -12% on yoy to Rs 1477.46 crore at end June 2020.
• Fresh slippages of advances stood at Rs 184 crore in Q1FY2021, while recoveries, upgradations, write-offs and NPA sales were short at Rs 68 crore.
• Fresh additions to GNPA were contributed by retail segment at Rs 1 crore followed by agriculture at Rs 1 crore, business banking at Rs 0 crore, commercial banking at Rs 8 crore and corporate at Rs 174 crore in Q1FY2021.-
• The standard restructured advances book of the bank stood at Rs 406 crore at end June 2020, compared with Rs 397 crore a quarter ago and Rs 619 crore a year ago.
• Provision coverage ratio improved to 75.1% at end June 2020 compared to 72.5% a quarter ago and 67.4% a year ago.

Business growth accelerates on strong deposits growth: Business growth of the bank increased 13% yoy at Rs 276235 crore at end June 2020. An improvement in business growth was mainly driven by sharp rise in the deposits growth to 17% at Rs 154938 core, while advances growth eased to 8% yoy at Rs 121297 crore at end June 2020,

Retail loan book share rises: Gross advances book increased 9% yoy to Rs 123437 crore at end June 2020, as the retail book moved up 16% to Rs 37908 crore, while agriculture loan book increased 16% to Rs 13645 crore and the business banking book expanded 13% to Rs 10512 crore at end June 2020. However, the commercial banking book rose 2% to Rs 11830 crore and corporate banking book gained 3% to Rs 49542 crore end June 2020.

Within the retail book, the mortgages jumped 15% to Rs 7009 crore at end June 2020 from Rs 6121 crore at end June 2019. Housing increased 13% to Rs 18201 crore, auto 22% to Rs 3134 crore, personal 67% to Rs 1551 crore, while other retail advances rose 12% to Rs 8013 crore at end June 2020.

CASA ratio improves: CASA deposits of the bank increased 19% at Rs 49616 crore gaining the share in overall deposits to 32.0% at end June 2020 compared to 31.4% a year ago. Within the CASA, the saving deposits increased at strong pace of 21% to Rs 42059 crore, while current account deposits also moved up 9% to Rs 7557 crore at end June 2020. Retail Deposits Ratio improved to 91.6% from 89.8% sequentially.

Network expansion: Bank has network footprint 1263 branches and 1936 ATMs at end June 2020.

Book Value per share stood at Rs 74.8 per share at end June 2020, while adjusted Book value (adjusting for NNPA and 10% of restructured advances) was at Rs 67.2 per share at end June 2020.

NII improves on higher margins: Bank has reported 12% growth in Net Interest Income (NII) at Rs 1296.44 crore for the quarter ended June 2020. The interest earned rose 7% to Rs 3444.15 crore, while interest expended also moved up 3% to Rs 2147.71 crore in the quarter ended June 2020.

Non-interest income jumps, on surge in treasury income: The non-interest income of the bank increased 25% to Rs 488.37 crore in Q1FY2021, as treasury income moved up 234% to Rs 304 crore in Q1FY2021. The core fee income of the bank dipped -33% to Rs 147 crore, forex income fell -44% to Rs 24 crore, while recoveries in written off accounts slipped -68% to Rs 13 crore in Q1FY2021.

Net total income increased 15% to Rs 1784.81 crore in the quarter ended June 2020.

Expense ratio dips: The operating expenses of the bank increased 12% to Rs 852.43 crore in the quarter ended June 2020. The expense ratio declined -160 bps yoy to 47.8% in the quarter ended June 2020, leading to 19% jump in the operating profit to Rs 932.38 crore in Q1FY2021.

Provisions surge: The provisions and contingencies galloped 105% to Rs 136.99 crore in the quarter under review. The bank has made provisions of Rs 256 crore for bad debt and Rs 144 crore for standard assets, while written back investment provisions of Rs 4 core in Q1FY2021.

With the jump in provisions, PBT declined -9% to Rs 537.76 crore. The effective tax rate was declined at 25.5% in Q1FY2021 compared to 35.0% in Q4FY2019. Net Profit rose 4% to Rs 400.77 crore in the quarter ended June 2020.

Financial Performance FY2020:

For the year ended March 2020 (FY2020), Bank posted 24% rise in the net profit at Rs 1542.78 crore. The net interest income rose 11% to Rs 4648.90 crore, while non-interest income moved up 43% to Rs 1931.41 crore in FY2020. The operating expenses increased 22% to Rs 3375.61 crore, while provision and contingencies galloped 37% to Rs 1172.17 crore in FY2020. The profit before tax rose 7% to Rs 2032.53 crore in FY2020. The expense ratio increased 129 bps to 51.3% in FY2020 compared to 50.0% in FY2019. After considering 24.1% of effective tax rate, the net profit moved up 24% to Rs 1542.78 crore in FY2020.