Highlights:

The bank serves 7.3 million customers through 607 branches and an employee strength of 17,000 end December 2022.

RBI has extended tenure of MD and the Board would identify potential candidates for a smooth transition.

It was an all-around performance with strong disbursements, gross loan book growth, and an even better deposit growth.

Collection continues to be good and credit quality has improved further.

The disbursements touched Rs 4838 crore recording almost another record from the previous quarter. The system took a little while to settle down with the new norms and now all is back to normal.

The monthly disbursements in December 2022 were the highest ever monthly disbursement.

The gross loan books grew 5% sequentially to Rs 21895 crore after total write-off of Rs 179 crore. All asset businesses performed well.

Asset growth was outpaced by the growth of deposits, which grew at 14% sequentially, registering the highest ever quarterly inflows of Rs 2806 crore.

Growth in deposits is focused on reducing the CD ratio and bringing it closer to 80%, in line with the rest of the banking industry.

Retail deposits grew 15% sequentially and CASA grew 10% sequentially in a market where most banks are witnessing negative CASA growth underlining efforts towards building a granular liability franchise.

The collection efficiency continues to be around 100%, taking PAR further down to 4.9% from 6.1% end September 2022.

GNPA is at 3.4% and NNPA is just 0.05% end December 2022.

SMA book as well as restructured book has shrunk further indicating the reduced stress.

The restructured book is now Rs 302 crore with collections, almost in line with the overall book.

NIM was 9.4% in Q3FY2023 and 9.6% in 9MFY23. Bank expects NIM in Q4FY23 similar to Q3FY23.

On the merger with UFSL, the NOCs have been received from both the BSE and NSE on 6 January 2023 and SEBI is in the process of seeking clarification from other regulatory bodies. The RBI has given notice to application. Once SEBI clearance is received, the bank will proceed to file the application with the NCLT. The proposed merger is expected to be completed by September 2023.

Outlook

Bank will be growing presence, both physically and digitally. In Q3FY, bank added 8 branches, marking foray into the new state Telangana. Bank would add 50-70 branches in FY24 with focus to expand in deposit-rich catchment areas.

Digital initiatives are towards direct acquisition of liability and asset customers. FinTech partnerships focus on generating more business.

Micro banking continues to be well backed by strong credit demand.

The micro and small enterprises business are in a transition phase and investing and expanding product suites and services to be more relevant to the semi-formal and formal segment.

The bank is upgrading technology platform to serve the customers better.

The housing loan book has crossed Rs 3000 crore level, while the segment has turned profitable.

IT integration is in place for vehicle finance business and bank is looking to scale up the business in the coming year

Among other secured businesses, bank is looking to scale up gold loan business once the test marketing is completed.

NBFC lending business is doing well with nil delinquencies.

The focus is on fee income with the addition of new products like 3 in 1 account and mutual fund in FY24.