The net interest income of the bank has increased 7%, while core fee income jumped 39% in the quarter ended June 2019. Further, the treasury income of the bank has jumped more than five-and-half times supporting 21% growth in the net total income.

However, the operating expenses of the bank surged 26% and provisions galloped 36%, causing 7% decline in the PBT in Q2FY2002. The asset quality of the bank has deteriorated in Q2FY2020.

Bank has witnessed moderation in business growth mainly due to deceleration in loan growth, while deposits growth has moved up. The CASA ratio was also flat at end September 2019. On advance front, the share of retail loans improved 46.4% at end September 2019. The margins of the bank were stable on sequential basis in Q2FY2020.

Asset quality moderates: Bank has witnessed pressure on asset quality in the quarter ended September 2019.

• GNPA ratio rose to 4.78%, while NNPA ratio also increased to 3.48% end September 2019.
• Outstanding standard restructured advances of the bank increased to Rs 416 crore (0.78% of advances) at end September 2019 compared to Rs 361.8 crore (0.68% of advances) at end June 2019.
• Stressed assets (NNPA and restructured advances) increased to 4.26% of advances at end September 2019 from 4.02% at end September 2018 and 3.47% at end September 2018.

Business growth eases: Business of the bank rose at moderated pace of 9% yoy to Rs 123658 crore at end September 2019 compared with 10% growth a quarter ago. Deposits increased at higher pace of 10% to Rs 70190 crore, while advances growth moderated to 7% at Rs 53468 crore at end September 2019. Credit-deposit ratio eased to 76.2% at end September 2019 from 77.1% at end June 2019.

Stable CASA ratio: CASA deposits increased 11% to Rs 19243 crore. CASA ratio improved to 27.4% at end September 2019 from 27.1% at end September 2018. The CASA ratio was steady on sequential basis from end June 2019. Meanwhile, bank has sharply reduced bulk deposits by 93% yoy to mere Rs 83 crore at end September 2019.

Retail loans driving advances growth: Advances rose 7% at Rs 53468 crore at end September 2019. The corporate advance rose 3% to Rs 28664 crore, while the retail advance galloped 12% to Rs 24804 crore at end September 2019.

* Retail advances gained share to 46.4% at end September 2019 from 44.2% at end September 2018.

* Break-up of advances shows housing at 15.3% of the advances, agriculture - 11.3%, SME - 19.1%, medium enterprises - 2.8%, large enterprises - 13.1%, other personal loans - 6.5% and other - 3.7% at end September 2019.

* Priority sector loans (PSL) of the bank stood at 43.6% of advances at end September 2019, while consistently exceeding the regulatory PSL target of 40%.

Investment book of the bank increased 12% to Rs 17935 crore at end September 2019. Share of AFS book increased to 27.6% at end September 2019 from 27.5% a quarter ago and 21.8% a year ago. The modified duration of AFS book declined to 1.88 years, while that of overall investment book also fell to 4.16 years at end September 2019.

Network expansion: Bank has opened 1 branches, while reduced 107 ATMs in the quarter ended September 2019. Bank has the network of 840 branches and 1084 ATMs at end September 2019.

Book value stood at Rs 200.1 per share at end September 2019. Adjusted Book value (excluding NNPA and 10% of restructured assets) was at Rs 132.7 per share at end September 2019.

NII growth improves on steady margins: For the quarter ended September 2019, the bank has posted 12% growth in interest income to Rs 1629.64 crore, while interest expenses increased 15% to Rs 1130.92 crore. NII rose at improved pace of 7% to Rs 498.72 crore, as net interest margin (NIM) was flat on sequential basis to 2.82% in Q2FY2020 from 2.81% in Q1FY2020.

Non-interest income surges: The non-interest income of the bank increased 53% to Rs 308.76 crore in Q2FY2020. The core fee income of the bank increased 39% to Rs 270 crore, while trading income surged 457% to Rs 39 crore in Q2FY2020 over Q2FY2019.

Net Total income increased 21% to Rs 807.48 crore in quarter under review.

Expense ratio rises: Operating expenses increased 26% to Rs 394.05 crore. The employee cost surged 47% to Rs 163.17 crore in Q2FY2020, while the other operating expenses also moved up 14% to Rs 230.88 crore. Expense ratio moved up to 48.8% in Q2FY2020 compared with 46.7% in Q2FY2019.

The operating profit increased 16% to Rs 413.43 crore in the quarter ended September 2019.

Provisions jump: Bank has witnessed jump in provisions and contingencies to Rs 262.40 crore in Q2FY2020 as against Rs 193.22 crore in the corresponding quarter last year. Thus, the Profit before tax (PBT) declined 7% to Rs 151.03 crore in Q2FY2020 over Q2FY2019.

Banks tax provisions stood at Rs 45.12 crore in Q2FY2020 against Rs 51.25 crore in Q2FY2019. Net profit declined 5% to Rs 105.91 crore in Q2FY2020.

Half Yearly Financial Performance:

For the year ended September 2019 (H1FY2020), the bank has posted 2% rise in net profit to Rs 281.33 crore. The net interest income improved 6% to Rs 993.31 crore, while non-interest income jumped 35% to Rs 553.55 crore in H1FY2020. The expense ratio galloped by 451 bps to 50.6% in H1FY2020 compared to 46.1% in H1FY2019. The operating expenses increased 26% to Rs 783.42 crore, while provision and contingencies moved up 12% to Rs 463.54 crore. The profit before tax declined 3% to Rs 299.90 crore in H1FY2020. After considering 6% of effective tax rate, the net profit rose 2% to Rs 281.33 crore in H1FY2020.