On business front, the bank as has posted 8% growth in business with 8% surge in loan book. The asset quality of the bank was stable in Q3FY2021. Bank has witnessed marginal decline in the credit to deposit ratio to 84.3% at end December 2020 from 85.0% at end December 2019. However, the CASA ratio of the bank has improved to 27.5% at end December 2020 from 23.3% at end December 2019.

The Bank already holds a provision of Rs 340 crore for Covid-19 end September 2020 and during the current quarter the Bank has made an additional provision of Rs 125 crore to meet any future contingency arising out of Covid pandemic. Thus, the total provision in this regard held by the bank end December 2020 is Rs 465 crore.

Asset Quality: The bank has maintained stable asset quality in Q3FY2021.

The Gross NPA was at 2.94% and Net NPA at 1.47% end December 2020 compared with 3.44% and 1.81% end September 2020.

No addition to NPA during Q3FY21 because of standstill clause as per the direction of Supreme Court.

The bank had provided moratorium to all eligible customers during the period from 01 March 2020 to 31 August 2020. For the demand as at end September 2020, only 2% of CC accounts and 6% of loan account have not paid their demand taking the total unpaid at 5%. Presently, 92% of CC exposure and 87% of Term loan exposure and 89% of total exposure, have paid their demands end December 2020.

During Q3, we have restructured 60 MSME borrowal accounts to the tune of Rs 321 crore. The total restructured MSME accounts as on 31 December 2020 stands Rs 807 crore consisting of 233 borrowers. The present % of restructured accounts constitutes 2.21% of advances.

The Provision Coverage Ratio improved to 73% end December 2020.

The Capital Adequacy Ratio increased to 17.39% (With Tier I 16.31% and Tier II 1.08% as per Basel III norms). If the profit is taken into account, the CRAR would be 18.89%.

RWA reduced from Rs 32462 crore in March 2020 to Rs 30652 crore in December 2020 mainly due to sanction of ECLGS & increase in Gold loans during 9M ended December 2020.

Healthy business growth: The business of the bank has increased 8% YoY to Rs 79792 crore end December 2020, driven by 8% surge in advances to Rs 36504 crore. Deposits rose 9% to Rs 43288 crore at end December 2020.

CASA deposits ratio jumps: The CASA deposits of the bank surged 28% YoY to Rs 11899 crore at end December 2020. The CASA ratio moved up to 27.5% at end December 2020 compared to 23.3% at end December 2019.

Strong loan growth: Advances growth was driven by retail loans rising 57% YoY to Rs 6031 crore and MSME 14% to Rs 12731 crore end December 2020. However, the credit to large industries declined 15% to Rs 1873 crore, wholesale traders 2% to Rs 4600 crore and credit to agriculture declined 10% YoY to Rs 4116 crore end December 2020.

The share of secured loans eased marginally to 98.9% at end December 2020 from 99.2% at end December 2019. The share of retail, agriculture and MSME loans moved up to 62.7% end December 2020 from 57.8% a year ago.

Across business lines, up to December 2020, the Bank has sanctioned Rs 2079 crore and disbursed Rs 1911 crore under the ECLGS.

Investment book of the bank rose 5% YoY to Rs 9583.9 crore at end December 2020. The AFS book dipped 65% to Rs 617 crore, while HTM book rose 22% to Rs 8967 crore at end December 2020. The AFS book duration stood at 2.98 years with the overall investment portfolio duration at 4.46 years at end December 2020.

Margins improve: The bank has showed sharp 95 bps YoY decline in cost of funds to 4.23%, while yield on fund decline only 73 bps YoY to 7.94% in Q3FY2021. Thus, the NIM has improved 20 bps YoY to 4.16%.

Branch expansion: The bank has network of 700 branches and 1749 ATM's, which is operated by 5886 employees end December 2020.

Book value of the bank stood at Rs 77.8 per share at end December 2020, while the adjusted book value (net of proforma NNPA and 10% of restructured advances) was Rs 60.3 per share at end December 2020.

NII rises as NIM improves: Bank has recorded 1% decline in the interest earned at Rs 1048.03 crore, while interest expenses declined 12% to Rs 558.98 crore in Q3FY2021. NII improved 14% to Rs 489.05 crore in the quarter ended December 2020.

Treasury income spurts: Bank has posted 1% decline in core fee income to Rs 74 crore. However, the recoveries and other income jumped 42% to Rs 37 crore and treasury income surged 184% to Rs 119 crore, supporting 61% jump in the overall non-interest income to Rs 229.77 crore in the quarter ended December 2020.

Expenses ratio improves: The operating expenses of the bank were flat at Rs 260.39 crore, as other expenses declined 5% to Rs 140.2 crore, while employee expenses rose 6% to Rs 120.19 crore in Q3FY2021. Cost to income ratio dipped to 36.2% in Q3FY2021 compared with 45.9% in Q3FY2020, helping the Operating Profit to increase 49% to Rs 458.43 crore.

Provisions and contingencies jumps: The bank has showed 170% jump in provisions to Rs 218.50 crore.

The NPA provisions declined 61% to Rs 31 crore, while bank has written back other provisions of Rs 15 crore in Q3FY2021. However, the bank has sharply raised standard asset provisions to Rs 192.5 crore and also created provision for depreciation of investment of Rs 10 crore in Q3FY2021.

Effective tax rate increased to 29.2% in Q3FY2021 from 15.4% in Q3FY2020. Net Profit declined 12% YoY to Rs 169.94 crore during quarter ended December 2020.

Financial Performance 9MFY2021:

Bank has posted 16% decline in net profit to Rs 481.64 crore in the year ended December 2020. The net interest income increased 12% to Rs 1401.15 crore, while non-interest income also moved up 12% to Rs 559.68 crore. The net total income moved up 12% to Rs 1960.83 crore in 9MFY2021. The cost-to-income ratio improved to 38.8% in 9MFY2021 compared to 42.7% in 9MFY2020. The operating expenses rose 2% to Rs 761.70 crore, while provision and contingencies zoomed 81% to Rs 552.50 crore, causing 8% decline in the profit before tax to Rs 646.64 crore in 9MFY2021. An effective tax rate rose to 25.5% in 9MFY2021 compared to 18.5% in 9MFY2020. The net profit has declined 16% to Rs 481.64 crore in 9MFY2021.