The bank has recorded an all-time high operating profit of Rs 677 crore in Q1FY2021, up by 93% over Q1FY2020, driven by strong growth in the treasury profit and controlled growth in expenses.

The bank has used entire treasury profit of Rs 355 crore to make various accelerated provisions in Q1FY2021.

The bank has made entire provision of Rs 189 crore in Q1FY2021 relating to fraud account in Q4FY2020 which had be amortized first three quarters of FY2021 in equal installments of Rs 63 crore and the same were credited to reserves, which were earlier debited from reserves.

The bank has created additional provisions of Rs 73.91 crore relating to covid-19 in Q1FY2021.

The bank has also created accelerated provisions of Rs 62 crore for some NPA accounts.

The bank also created additional provisions of Rs 22.41 crore for ICA accounts.

Further, the bank created provisions of Rs 33.79 crore for employee benefits.

The bank has also identified some of the borderline accounts as NPA amounting to Rs 166.84 crore, which otherwise would have continued to be standard under covid-19 package.

The credit cost was slightly higher at 0.45% compared with 0.43% last year. The provision coverage ratio has significantly improved to 67.93% end June 2020.

The bank has exposure of Rs 1413 crore under NCLT cases against which bank is holding provisions of Rs 1313 crore. So, as and when the resolution take place the bank expect substantial amount of revenues.

The bank has exhibited substantial improvement in interest rates driven by a decline in the cost of funds and steady yield on loans.

The bank expects to maintain cost to Income ratio around 45%.

The bank has started digital loan sanction and currently 40-60% of the loans are digitally sanctioned and going forward the bank aims for 80 to 90% of digital loan sanction.

The bank has taken asset classification benefit on loan amounting to Rs 730 crore under Moratorium 2 and Rs 240 crore under Moratorium 1, aggregating to Rs 970 crore and also created entire 10% provisions.

The loan book under moratorium-1 stood at 46.62% which has now declined to 44.89%, while the loan book under moratorium-2 under stands at 6.26%. So together, about 51% of the loan book is under moratorium.

Segment wise, in the agricultural statement 32% of loan book in under moratorium-1 and 14% under moratorium-2.

In the corporate segment, the loan book moratorium-1 strand at 35.28% and 3.54% under moratorium-2.

In the MSME segment, 65.84% of the loan book is under moratorium-1 and 2.6% under moratorium-2.

In the retail segment 45.4% of the loan book is under moratorium-1 and 9.465 under moratorium-2

The bank has exposure of Rs 8464 crore to NBFC segment of which only 5% of the exposure is under moratorium.

The bank has been strongly focusing on cost reduction through various measures and expects to save at least Rs 100 crore in FY2021. The bank has put on hold all new branch expansion plans, while its targeting 10 to 44% reduction in the branches rent. The bank has already achieved in reduction in rents for 90 branches out of total 858 branches of which 150 branches are two to three years old.

The bank is planning no additional recruitment for FY2021 and there would not be any promotions also. Further, 315 employees are scheduled for retirement in FY2021.

The board members have agreed for 29% reduction and committee members have agreed for 20% reduction in seating fees.

The MD of the bank has also agreed for forgoing variable pay for current year.

The credit cost of the bank stood at 2.28% for FY2020, while the bank expects its credit cost to be below FY2020 for FY2021.

The bank expects further improvement in asset quality in Q2FY2021.

The capital adequacy ratio of the bank is comfortable, while capital raising would depend on post covid growth expectations.