Highlights:

. The deposits base of the bank increased 17%, while CASA deposits moved up 22%. Advances growth slowed to 12% end September 2019, against the guidance of 15%-18% growth. The bank is keeping its underwriting standards reasonably tight to ensure not to get into problems in the future. as per the bank, a few percentage point lower growth will not alter anything materially.

. The share of CASA to total deposits which was 24% for Q2 FY19 has improved to 25% in FY 2020. CA portion increased by 16% and SA portion by 26% on y-o-y basis.

. As per the bank, the overall asset quality is on expected lines, while slippage ratio looks optically higher by 10-20 basis points because of lower loan growth / denominator.

. The bank expects reductions in Cash Credit utilization in the SME segment, while they have some concern about next 2-3 quarters but feel things will improve beyond that.

. As per the bank, its time to wait for proper growth opportunities and not a prudent time to accelerate growth with an eye on downward risks, while focus should be on quality.

. There is no undue spike in SMA proportions and the bank is closely watching the developments.

. The bank had indicated about stress in one paper mill account survived in Q2 but may not survive Q3.

. NIM for Q2 dropped by 20 points to 3.91%, as indicated earlier, because of combination of both yield drop and CD ratio. The bank is trying best to increase CD ratio and have reduced term deposit rates also. But still term deposit accretion is not slowing down. Credit growth also needs to pick up.

. Operating expenses increases as usual and hence cost to income ratio shows upside when compared to Q1FY 20. The bank is working hard to maintain the Cost income ratio as per trajectory levels and if anything goes out of expectations, it will have some spike in the cost to income ratio.

. The reduction in Income tax rate provided the benefit of Rs 37 crore towards current tax for the Half year and Rs 13 towards Deferred Tax Liability has been recognized during the quarter.

. The outstanding Security Receipts (SRs) eased to Rs 303 crore end September 2019 from Rs 324 crore end March 2019. Top 4 accounts take care of around 90% of our total SRs. The bank has received a sum of Rs 10.48 crore during Q1FY 20 and Rs 10.30 crore in Q2FY 20. Since the repayment terms goes up to 2022, the bank expect there will be cash flows continuously.

. Bank expects to maintained ROA of 1.5-1.6% and RoE of 15+ even after taking into account various potential shocks including External bench marks for floating rates.

. The bank has been recommending to its SME customers to use the RBI dispensation. So far, the bank has restructured 121 accounts amounting to Rs 117 crore end September 2019. No account slipped to NPA during Q2 FY 2020.

. For Q2 FY20, the total provisions made was Rs 153 crore an increase of 20% compared to Rs 128 crore in Q2 FY19. Provision for Bad and Doubtful debts stands increased from Rs 47 crore to Rs 98 crore for Q2 FY20 on account of increased in slippages.

. For the half year ended 2020, the total provisions increased by 20% to Rs 319 crore from Rs 266 crore in H1 FY19. Provision for NPA were Rs 98 crore, standard assets Rs 9 crore, restructured accounts Rs 0.75 crore and others Rs 0.20 crore.