Highlights:

The bank has witnessed net losses in Q3FY2021 on account of recognizing interest income reversals of Rs 73 crore on proforma NPA and 100% provision of Rs 67 crore for fraud incident relating to one infrastructure account.

The bank has made provision of entire 100% on fraud incident, instead of spread it over four quarters.

On advances front, the sharp decline in corporate book has led to decline in the overall loan book. The share of corporate loan book has declined to 24% from 30% a year ago. The bank would continue to be selective in the corporate segment and remains focused on agriculture, MSME and gold loans.

The bank has improved CASA ratio to 27.9% and recorded 12% growth in NRI deposits which forms 31% of deposits.

The bank has sharply improved provision coverage ratio to 72% end December 2020. The provision coverage ratio excluding technical write-offs has improved to 58% end December 2020 from 48% a quarter ago and 32% a year ago.

The bank has created provision of Rs 154 crore for proforma NPAs in Q3FY2021 in addition to Rs 22 crore in Q2FY2021, while bank continues to hold covid related provisions of Rs 105 crore. This Rs 275 crore of provisions not used in the calculation of provision coverage ratio.

The bank expects to maintain provision coverage ratio above 60%.

The bank has recognized proforma slippages of Rs 1379 crore in Q3FY2021 after Rs 130 crore in Q2FY2021.

Of the proforma slippages of Rs 1379 crore in Q3FY2021, Rs 544 crore came from two large corporate accounts. However, the bank is expecting recoveries of Rs 285 crore from one of these account and upgrdation of sector account of Rs 115 crore in Q4FY2021.

For Q4FY2021, the bank expects further proforma slippages of Rs 550 crore.

The bank has conducted restructuring of loans of Rs 44 crore under one time restructuring framework of RBI for covid 19 stress. The bank expects further restructuring of Rs 850 crore in Q4FY2021, which is likely to be contributed by segments such as corporate, business banking and personal.

The bank expects slippage rate of 25-35% for its restructured loan book

The credit cost is estimated at 2.2% for FY2021.

The bank would continue to focus on growing low cost CASA, gold lending, NRE deposits and improve efficiency.

Under vision 2024, bank expects loan growth to be slow initially and pickup as bank gets traction.

The margins of the bank have been impacted to high interest income reversals. With high proforma slippages expected for Q4FY2021, the margin will remain under pressure on account of further interest income reversals.

The collection efficiency stood at 89% for Q3FY2021. Segment wise collection efficiency stood at 93% for housing, 91% for mortgages, 94% for vehicles, 91% for corporate, 88% for business banking and 79% for others.

On capital raising front, the bank is currently looking at quantum, timing and mode of capital raising.

The bank has network of 877 branches, 51 extension counters and 1443 ATMs end December 2020.