The NIMs +Fees declined to 5.78% in Q1FY21 from 6.76% in Q1FY20 because of lower disbursals across businesses. The negative carry on account of maintaining higher liquidity buffer of Rs 6,600 crore carried as a prudent measure was Rs 84 crore. The company has created incremental provisions of Rs 577 crore in Q1FY21 to strengthen balance sheet including COVID-19 provision of Rs 277 crore in Q1FY21 (5% of 1-90 DPD book with moratorium, along with Rs 209 crore in Q4FY20) and macro-prudential provisions of Rs 300 crore.

The net profit for the lending business plunged 72% to Rs 195 crore in Q1FY2021, driven by 55% dip in rural business net profit to Rs 114 crore. Housing Finance business net profit declined 89% to Rs 23 crore, while the infrastructure finance net profit fell 88% to Rs 18 crore and IDF skidded 46% to Rs 40 crore. However, the defocused business segment registered loss of Rs 56 crore in Q1FY2021.

The consolidated income from operations of the company declined 8% to Rs 3397.53 crore for the quarter ended June 2020, as interest income fell 1% to Rs 3295.24 crore. Other income dipped 73% to Rs 102.29 crore for quarter ended June 2020.

Interest expenses rose 3% to Rs 1978.20 crore. Net Interest Income declined 5% to Rs 1317.04 crore. Operating expenses rose 22% to Rs 583.57 crore, causing 35% decline in the operating profits to Rs 835.76 crore. The cost-to-income ratio jumped to 29.3% in Q1FY2021 from 23.9% in Q1FY2020.

Depreciation jumped 18% to Rs 18.59 crore, while provisions galloped 78% to Rs 943.52 crore. The pre tax and pre-EO loss came in at Rs 126.35 crore for quarter ended June 2020. The company has recorded gains of Rs 225.61 crore from stake sale in subsidiary helping to post PBT of Rs 99.26 crore. The tax write-back were Rs 48.18 crore in Q1FY2021. Net Profit of the company, after share in profit of associates and non-controlling interest, declined 73% to Rs 148.31 crore for quarter ended June 2020.

Business performance

Loans and Advances declined 1% to Rs 98879 crore at end June 2020 as compared to Rs 99904 crore at end June 2019. Loans & Advances in the focused businesses rose 4% to Rs 93706 crore at end June 2020 compared with Rs 90500 crore at end June 2019. In the de-emphasized portfolio, the loans & advances dipped 45% to Rs 5173 crore end June 2020.

The company has posted 76% decline in loan disbursements to Rs 2318 crore in Q1FY2021. The disbursements in the focused businesses fell 76%, as the disbursements of the infrastructure finance segment declined 67% to Rs 1089 crore in Q1FY2021. The rural business disbursements also fell 78% to Rs 913 crore and housing finance business dipped 85% to Rs 317 crore in Q1FY2021.

In the Investment Management business, Average Assets under Management (AAUM) slipped 21% to Rs 58361 crore in Q1FY2021 from Rs 73497 crore in Q1FY2020. The AUM for Equity and High-Quality Fixed income asset classes as on 30^th June 2020 stood at Rs 33,295 crore and Rs 12,442 crore, with a growth of 19% and 14% respectively on QoQ basis.

Gross Stage 3 assets of the company have declined to 5.24% end June 2020 from 5.36% a quarter ago and 5.72% a year ago, while the Net State 3 assets have eased to 1.71% from 2.28% a quarter ago and 2.48% a year ago. The provision coverage ratio improved to 69% from 59% a quarter ago and 58% a year ago.

The company continues to maintain strong capital adequacy of 21.18%

Book value per share of the company stood at Rs 74.2 per share at end June 2020. Adjusted book value (net of NNPA) per share of the company stood at Rs 66.5 per share at end June 2020.

Moratorium

The percentage of borrowers opting for moratorium drastically came down in Q1FY21 as against Q4FY20. There is considerable reduction in portfolio under moratorium for retail products from 79% in March-20 to 44% in June 2020. The overall moratorium for Infrastructure finance, IDF and Real Estate borrowers remained close to 40%, as majority of the Infrastructure portfolio is operational and has a ‘must run' status.

Financial Performance FY2020

The consolidated income from operations increased 14% to Rs 13244.74 crore for FY2020, while other income of the company dipped 22% to Rs 1303.39 crore. The total income declined 9% to Rs 14548.13 crore for FY2020. Interest expenses increased 10% to Rs 7513.60 crore. Operating expenses declined 14% to Rs 2278.67 crore, allowing the operating profits to improve 25% at Rs 4755.86 crore. The cost-to-income ratio rose to 25.3% in FY2020 from 24.1% in FY2019. Depreciation jumped 64% to Rs 81.59 crore, while provisions zoomed 185% to Rs 1994.19 crore. Profit before tax declined 12% yoy basis at Rs 2680.08 crore. Effective tax rate increased to 37% in FY2020 from 26.9% in FY2019. Net Profit of the company, after share in profit of associates and non-controlling interest, declined 24% to Rs 1700.17 crore for FY2020.