However, the bank has posted strong growth in net interest income at 24%, while further improving Net Interest Margins (NIMs) to 3.22% in Q3FY2021. The bank has also posted the strong growth in non-interest income in Q3FY2021.

The advances growth of the bank has been steady at 6% end September 2020. The bank has further improved share of retail loans to 54%, while also showing surge in CASA deposits ratio to 34.5% end December 2020.

Asset quality improved: Asset quality of the bank improved sharply, in absolute terms, for the fifth sequential quarter in Q3FY2021.

Gross NPA has declined 4% on yoy basis to Rs 3470.18 crore, while Net NPA dipped 61% on yoy to Rs 757.24 crore at end December 2020.

Fresh slippages of advances stood at Rs 22 crore in Q3FY2021, while recoveries, upgradations, write-offs and NPA sales were higher at Rs 116 crore.

Fresh additions to GNPA from retail, corporate and commercial banking sector were nil, while from agriculture were at Rs 6 crore and business banking at Rs 16 crore in Q3FY2021.

Proforma slippages of NPAs was at Rs 1068 crore for Q2 and Q3FY21, of which one large infra account of Rs 205 crore is expected to be resolved soon.

The standard restructured advances book of the bank stood at Rs 1129 crore at end December 2020, compared with Rs 441 crore a quarter ago and Rs 463 crore a year ago.

Provision coverage ratio rose to 77.1% at end December 2020 compared to 64.7% a quarter ago and 66.4% a year ago.

Business growth steady: Business growth of the bank was steady at 9% yoy to Rs 287175 crore at end December 2020. The moderation in business growth was mainly driven by flat loan growth of 6% yoy at Rs 125505 crore at end December 2020, while the deposits growth was also steady at 12% to Rs 161670 crore at end December 2020.

Strong retail loan book growth: Gross advances book increased 6% yoy to Rs 128180 crore at end December 2020, as the retail book moved up 16% to Rs 42247 crore, while agriculture loan book increased 24% to Rs 15661 crore and the business banking book expanded 13% to Rs 11652 crore at end December 2020. Further, the commercial banking book rose 8% to Rs 12932 crore, while corporate banking book declined 7% to Rs 45689 crore end December 2020.

Within the retail book, the mortgages moved up 9% to Rs 7489 crore at end December 2020 from Rs 6884 crore at end December 2019. Housing increased 8% to Rs 19043 crore, auto 7% to Rs 3346 crore, personal 32% to Rs 1710 crore, while other retail advances jumped 39% to Rs 10659 crore at end December 2020.

CASA ratio improves: CASA deposits of the bank increased 23% at Rs 55740 crore gaining the share in overall deposits to 34.5% at end December 2020 compared to 31.5% a year ago. Within the CASA, the saving deposits increased at strong pace of 23% to Rs 46582 crore, while current account deposits also galloped 23% to Rs 9158 crore at end December 2020. Retail Deposits Ratio eased to 92.3% from 93.0% sequentially.

Network expansion: Bank expanded its footprint and added 1 branch and 7 ATMs during the quarter to take the tally to 1272 branches and 1948 ATMs at end December 2020.

Book Value per share stood at Rs 78.3 per share at end December 2020, while adjusted Book value (adjusting for proforma NNPA and 10% of restructured advances) was at Rs 70.6 per share at end December 2020.

Strong NII growth on higher NIMs: Bank has reported 24% growth in Net Interest Income (NII) at Rs 1437.04 crore for the quarter ended December 2020. The interest earned rose 4% to Rs 3459.52 crore, while interest expenses dipped 7% to Rs 2022.48 crore in the quarter ended December 2020.

Non-interest income jumps on higher fee and treasury income: The non-interest income of the bank increased 18% to Rs 481.84 crore in Q3FY2021, Core fee income of the bank surged 23% to Rs 312 crore, while treasury income moved up 63% to Rs 106 crore in Q3FY2021. Forex income fell 20% to Rs 45 crore, while recoveries in written off accounts declined 41% to Rs 19 crore in Q3FY2021.

Net total income increased 23% to Rs 1918.88 crore in the quarter ended December 2020.

Expense ratio eases: The operating expenses of the bank increased 17% to Rs 955.98 crore in the quarter ended December 2020. The expense ratio declined 258 bps yoy to 49.8% in the quarter ended December 2020, supporting 29% surge in the operating profit to Rs 962.90 crore in Q3FY2021.

Provisions surge: The provisions and contingencies galloped 161% to Rs 138.18 crore in the quarter under review.

With the jump in provisions, PBT declined 7% to Rs 542.28 crore. The effective tax rate was higher at 25.5% in Q3FY2021 compared to 24.4% in Q4FY2019. Net Profit fell 8% to Rs 404.10 crore in the quarter ended December 2020.

Financial Performance 9MFY21

For the nine months ended December 2020 (9MFY2021), Bank posted 10% dip in the net profit at Rs 1112.49 crore. The net interest income rose 20% to Rs 4113.33 crore, while non-interest income moved up 21% to Rs 1479.54 crore in 9MFY2021. The operating expenses increased 12% to Rs 2691.06 crore, while provision and contingencies increased 133% to Rs 1407.30 crore in 9MFY2021. The profit before tax declined 9% to Rs 1494.51 crore in 9MFY2021. The expense ratio dipped 363 bps to 48.1% in 9MFY2021 compared to 51.7% in 9MFY2020. After considering 25.6% of effective tax rate, the net profit declined 10% to Rs 1112.49 crore in 9MFY2021.