However, the bank has maintained stable asset quality, while reduce GNPA and NNPA ratio in Q4FY2019. The bank has continued to improve provisions coverage ratio on NPAs to 58.5% end March 2019. The bank has maintained stable loan growth of 16%, while the CASA deposit ratio of the bank has increased to 28.1% end March 2019.

Asset quality stable: Bank has maintained stable asset quality in the quarter ended March 2019.

• The GNPA ratio has declined to 4.41%, while NNPA ratio also declined to 2.95% end March 2019.
• Outstanding standard restructured advances of the bank eased to Rs 299 crore (0.54% of advances) end March 2019 compared to Rs 327 crore (0.63% of advances) at end December 2018.
• Stressed assets (NNPA and restructured advances) declined to 3.49% of advances at end March 2019 from 3.63% at end December 2018 and 3.56% end March 2018.
• RWA increased 6% to Rs 47880.00 crore at end of March 2019 from a year earlier.
• The bank has improved provision coverage ratio to 58.5% end March 2019 from 57.2% a quarter ago and 54.6% a year ago.
• The SMA 2 category loan book of the bank has dipped to Rs 168 crore end March 2019 from Rs 334 crore a quarter ago.

Business growth ease, loan growth remains steady: Business of the bank increased at slower pace of 12% yoy to Rs 123280 crore at end March 2019, driven by moderation in deposits growth to 9% at Rs 68452 crore, while advances increased at steady pace of 16% to Rs 54828 crore at end March 2019. Credit-deposit ratio rose to 80.1% at end March 2019 from 79.8% at end March 2018.

CASA ratio improves: CASA deposits increased 9% to Rs 19215 crore. CASA ratio improved to 28.1% at end March 2019, compared with 26.6% at end March 2018 and 28.0% at end March 2018. Meanwhile, bank has sharply reduced bulk deposits by 64% yoy to Rs 1113 crore at end March 2019.

Corporate loan driving advances growth: Advances of the bank increased 16% at Rs 54828 crore at end March 2019. The corporate advance moved up 22% to Rs 26701 crore, while the retail advance increased 10% to Rs 23466 crore at end March 2019. Retail advances share declined to 42.8% at end March 2019 from 45.1% at end March 2018.

Break-up of advances shows housing at 13.0% of the advances, agriculture - 10.9%, SME - 18.3%, medium enterprises - 2.8%, large enterprises - 15.2%, other personal loans - 5.6% and other - 4.8% at end March 2019.

Priority sector loans (PSL) of the bank stood at 44.2% of advances at end March 2019, while consistently exceeding the regulatory PSL target of 40%, but its share declined from 47.4% at end December 2018 and 52.8% at end March 2018.

Investment book of the bank increased 5% to Rs 16185 crore at end March 2019. SLR investment stood at Rs 13655 crore. Share of AFS book increased to 20.8% at end March 2019 from 19.4% a quarter ago and declined 21.5% a year ago. The modified duration of AFS book declined to 2.30 years, while that of overall investment book was nearly flat at 4.58 years at end March 2019.

Network expansion: Bank has opened 7 branches and reduced 334 ATMs in the quarter ended March 2019. Bank has the network of 836 branches and 1210 ATMs at end March 2019.

Book value stood at Rs 190.1 per share at end March 2019. Adjusted Book value (excluding NNPA and 10% of restructured assets) was at Rs 131.8 per share at end March 2019.

NII declines as NIMs moderate: For the quarter ended March 2019, the bank has posted 6% growth in interest income to Rs 1531.29 crore, while interest expenses increased 17% to Rs 1050.41 crore. NII declined 11% to Rs 480.88 crore, as net interest margin (NIM) declined to 2.93% in Q4FY2019 from 3.18% in Q4FY2018.

Non-interest income declines: The non-interest income of the bank fell 1% to Rs 290.59 crore in Q4FY2019. The core fee income of the bank dipped 12% to Rs 248 crore, while trading income surged 258% to Rs 43 crore in Q4FY2019 over Q4FY2018.

Net Total income declined 8% to Rs 771.47 crore in quarter under review.

Expense ratio jumps: Operating expenses increased 24% to Rs 447.24 crore. The employee cost galloped 43% to Rs 203.45 crore in Q4FY2019, while the other operating expenses increased 11% to Rs 243.79 crore. Expense ratio surged 58.0% in Q4FY2019 compared with 43.1% in Q4FY2018.

The operating profit dipped 32% to Rs 324.23 crore in the quarter ended March 2019.

Provisions remain elevated: Bank has witnessed elevated provisions and contingencies of Rs 217.73 crore in Q4FY2019. Thus, the Profit before tax (PBT) came in at Rs 106.50 crore in Q4FY2019.

Banks tax provisions stood at Rs 44.77 crore in Q4FY2019 against write-back of Rs 77.42 crore in Q4FY2018.

Net profit increased to Rs 61.73 crore in Q4FY2019 from low base of Rs 11.00 crore in Q4FY2018.

Annual Financial Performance:

For the year ended March 2019 (FY2019), the bank has posted 47% increase in net profit to Rs 477.24 crore. The net interest income improved 3% to Rs 1905.12 crore, while non-interest income rose 5% to Rs 1001.96 crore in FY2019. The expense ratio increased by 252 bps to 50.1% in FY2019 compared to 47.6% in FY2018. The operating expenses increased 9% to Rs 1457.27 crore, while provision and contingencies fell 28% to Rs 842.00 crore. The profit before tax increased 96% to Rs 607.81 crore in FY2019. After considering 21% of effective tax rate, the net profit increased 47% to Rs 477.24 crore in FY2019.