The bank has maintained steady NIM at 2.83% on sequential basis, while posted strong growth in non-interest income. CASA deposits ratio of the bank steady on sequential basis at 27.4% end December 2019. On advance front, the share of retail loans further improved 46.6% at end December 2019. The bank has further improved branch network to 845 branches end December 2019.

Asset quality weakens: Bank has showed deterioration in asset quality in the quarter ended December 2019.

• GNPA ratio moved up to 4.99%, while NNPA ratio increased to 3.75% end December 2019.
• Outstanding standard restructured advances of the bank eased to Rs 393.00 crore (0.72% of advances) at end December 2019 compared to Rs 416.00 crore (0.78% of advances) at end September 2019.
• Stressed assets (NNPA and restructured advances) rose to 4.46% of advances at end December 2019 from 4.26% at end September 2019 and 3.63% at end December 2018.

Business growth eases: Business of the bank increased at slower pace of 8% yoy to Rs 126267 crore at end December 2019. Deposits increased at steady pace of 10% to Rs 71356 crore, while advances growth eased to 6% at Rs 54911 crore at end December 2019. Credit-deposit ratio improved to 77.0% at end December 2019 from 76.2% at end September 2019.

Stable CASA ratio: CASA deposits increased 13% to Rs 19546 crore. CASA ratio was steady on sequential basis at 27.4% at end December 2019 compared with 27.4% at end September 2019, while increased from 26.6% at end December 2018. Meanwhile, bank has sharply reduced bulk deposits by 94% yoy to mere Rs 82 crore at end December 2019.

Retail loans driving advances growth: Advances rose 6% at Rs 54911 crore at end December 2019. The corporate advances were flat yoy at to Rs 29344 crore, while the retail advance galloped 13% to Rs 25567 crore at end December 2019.

Retail advances gained share to 46.6% at end December 2019 from 43.7% at end December 2018. Break-up of advances shows housing at 15.7% of the advances, agriculture - 11.9%, SME - 18.8%, medium enterprises - 3.1%, large enterprises - 12.5%, other personal loans - 6.7% and other - 5.5% at end December 2019.

Priority sector loans (PSL) of the bank stood at 44.6% of advances at end December 2019, consistently exceeding the regulatory PSL target of 40%, while increased from 43.6% a quarter ago. PSL loans stood at 47.4% a year ago.

Investment book of the bank increased 15% to Rs 17999 crore at end December 2019. Share of AFS book increased to 25.4% at end December 2019 from 27.6% a quarter ago and 19.4% a year ago. The modified duration of AFS book declined to 2.21 years, while that of overall investment book was nearly flat at 4.48 years at end December 2019.

Network expansion: Bank has opened 5 branches in the quarter ended December 2019. Bank has the network of 845 branches and 1043 ATMs at end December 2019.

Book value stood at Rs 204.4 per share at end December 2019. Adjusted Book value (excluding NNPA and 10% of restructured assets) was at Rs 130.2 per share at end December 2019.

NII growth slows, as loan growth moderates: For the quarter ended December 2019, the bank has posted 7% growth in interest income to Rs 1621.55 crore, while interest expenses increased 9% to Rs 1113.80 crore. NII rose at moderated pace of 4% to Rs 507.75 crore. Net interest margin (NIM) declined to 2.82% in Q3FY2020 from 2.95% in Q3FY2019.

Strong non-interest income growth: The non-interest income of the bank increased 33% to Rs 402.13 crore in Q3FY2020. The core fee income of the bank increased 13% to Rs 220 crore, while trading income surged 70% to Rs 182 crore in Q3FY2020 over Q3FY2019.

Net Total income rose 15% to Rs 909.88 crore in quarter under review.

Expense ratio improves: Operating expenses increased 5% to Rs 408.09 crore. The employee cost declined 3% to Rs 186.46 crore in Q3FY2020, while the other operating expenses increased 6% to Rs 221.63 crore. Expense ratio dipped to 44.9% in Q3FY2020 compared with 49.3% in Q3FY2019.

The operating profit increased 25% to Rs 501.79 crore in the quarter ended December 2019.

Provisions jump: Bank has witnessed jump in provisions and contingencies to Rs 314.70 crore in Q3FY2020 as against Rs 208.99 crore in the corresponding quarter last year.

Thus, the Profit before tax (PBT) declined 2% to Rs 187.09 crore in Q3FY2020 over Q3FY2019.

Banks tax provisions increased to Rs 63.95 crore in Q3FY2020 from Rs 50.97 crore in Q3FY2019. Net profit declined 12% to Rs 123.14 crore in Q3FY2020.

YTD Financial Performance:

For the nine-months ended December 2019 (9MFY2020), the bank has posted 3% decline in net profit to Rs 401.47 crore. The net interest income improved 5% to Rs 1501.06 crore, while non-interest income jumped 34% to Rs 955.68 crore in 9MFY2020. The expense ratio increased by 120 bps to 48.5% in 9MFY2020 compared to 47.3% in 9MFY2019. The operating expenses increased 18% to Rs 1191.51 crore, while provision and contingencies jumped 25% to Rs 778.24 crore. The profit before tax fell 3% to Rs 486.99 crore in 9MFY2020. After considering 18% of effective tax rate, the net profit eased 3% to Rs 401.47 crore in 9MFY2020.