The company has maintained healthy GNPA as well as NNPA ratio end December 2017, while the spreads also continued to remain strong and stable at 3.22% in 9MFY2018 from 3.27% in 9MFY2017, as cost of funds eased to 7.92% from 8.80%. The loan yield has eased to 11.14% from 12.07%.

Total income increased 30% to Rs 3349.17 crore in the quarter ended December 2017. Interest expense increased 20% to Rs 1953.14 crore, while other expenses (including staff cost, provisions and other expenses) moved up 42% to Rs 257.77 crore. Ensuing Gross Profit increased 59% to Rs 1894.75 crore in Q3FY2018.

Depreciation increased 32% to Rs 8.05 crore, while provisions galloped 84% to Rs 327.34 crore. As a prudent means the company has utilized 33% of the one-off pre-tax gain, to make an additional special provision, in the form of counter-cyclical provisions, of Rs 180 crore. The provision cover ratio has jumped to 181% on Gross NPA end December 2017.

PBT moved up 55% to Rs 1559.36 crore. Effective tax rate was lower at 25.3% in Q3FY2018 from 25.4% in Q3FY2017. The final bottomline of the company moved up 55% to Rs 1167.73 crore in the quarter ended December 2017.

Loan book and asset quality

The loan portfolio of the company increased at strong pace of 32% to Rs 107328 crore at end December 2017 over December 2016. The sold down portfolio stood at Rs 11250 crore at end December 2017, showing an increase of 29% over December 2016. The share of mortgage loans stood at 79%and corporate mortgage at 21% end December 2017.

Gross NPA ratio was marginally lower at 0.77% at end December 2017 from 0.85% at end December 2016. Meanwhile, Net NPA ratio remained flat at 0.31% at end December 2017. The general and specific provision stood at 0.46% at end December 2017. The provision coverage ratio was strong at 181% at end December 2017.

The company has declared a higher interim dividend of Rs 14 per share, which includes Rs 5 of dividend being paid from the one-time gain on the equity stake sale in OakNorth Bank.

With this partial divestment of Rs 768 crore, the company has recovered its entire initial investment of Rs 663 crore in OakNorth Bank made 2 years ago in November 2015. The balance stake stands at 20% now valued at Rs 1510 crore, multiplying investment 3.6x in 2 years. The company continues to be the largest investor in the company with two board nominees.

Book value of the company stood at Rs 306.6 per share at end December 2017. Adjusted book value (net of net NPAs) was at Rs 298.8 per share at end December 2017.

YTD Financial Performance

For the nine months ended December 2017 (9MFY2018), the company has reported 26% rise in total income at Rs 9372.20 crore. Interest expense moved up 26% to Rs 10673.17 crore, while other expenses galloped 26% to Rs 646.78 crore. Ensuing Gross profit increased 36% to Rs 4465.54 crore. Depreciation increased 43% to Rs 23.35 crore and provision moved up 50% to Rs 709.34 crore. PBT increased 33% to Rs 3732.85 crore. Effective tax rate stood at 25% in compared to 26%. The final bottomline of the company improved 36% to Rs 2817.02 crore in 9MFY2018.