However, the Net Interest Margin (NIM) of the bank eased to 4.2% in Q3FY2021 compared with 4.3% in the previous quarter. The loan book of the bank has declined 5% yoy at end December 2020.

Bank has raised Current Account-Saving Account (CASA) deposits ratio to 31.1% at end December 2020 from 26.8% a year ago.

Bank has continued to expand branch network at healthy pace touched the branch network level of 403 branches along with 412 ATMs at end December 2020.

Asset quality weakness: Bank has witnessed increase in GNPA and NNPA ratios on proforma basis, while banks restructured advance book has increased in Q3FY2021.

GNPA ratio declined 150 bps qoq to 1.84%, while NNPA ratio also dipped 67 bps qoq to 0.71% at end December 2020.

The GNPA ratio on proforma basis jumped to 4.57% end December 2020 from 3.49% end September 2020, while NNPA ratio moved up to 2.37% from 1.49%.

Fresh slippages of advances on proforma bass stood at Rs 1470 crore, while bank has recorded recoveries and upgradations of Rs 83 crore and conducted write-offs of Rs 779 crore in Q3FY2021.

Restructured assets book increased on sequential basis to Rs 508 crore (0.90% of the advances) at end December 2020 from 0.09% end September 2020 and 0.06% end December 2020.

The securities receipts on the banks book strands nil at end December 2020.

The provision coverage ratio of the bank stood at 86.4% at end December 2020.

Risk weighted assets moved up 5% to Rs 71818 crore at end December 2020.

Business growth eases: The business of the bank rose 1% to Rs 123628 crore at end December 2020. Deposits increased 7% to Rs 67184 crore, while advances declined 5% to Rs 56444 crore at end December 2020. Credit-deposit ratio of the bank declined to 84.0% at end December 2020 from 87.1% a quarter ago, while it was steady from 94.8% a year ago.

Wholesale loans share declines: Corporate or wholesale loans accounted for 41.6% of the advances portfolio, while non-wholesale loans (including retail, micro loans, MSME, and agri) accounted for 58.4% at end December 2020 compared with 52.6% : 47.4% at end December 2019.

The wholesale loans dipped 25% to Rs 23506 crore, while non-wholesale loans jumped 16% to Rs 32938 crore end December 2020 over December 2020.

CASA ratio improves: The CASA deposits continued to grow at strong pace of 24% to Rs 20867 crore at end December 2020. CASA ratio increased to 31.1% at end December 2020 up from 31.1% from 26.8% a year ago.

Margins ease: Bank has showed decline in net interest margin (NIM) to 4.20% in Q3FY2021 from previous quarter and 4.6% in the corresponding quarter last year. The decline in CD ratio and loan book over a year earlier level has led to contraction in margins for the bank. Yield on advances declined 80 bps yoy 11.5%, while cost of funds dipped 98 bps yoy to 5.6% in Q3FY2021.

Network expansion: Bank has added 5 new branches during the quarter taking the total branch count to 403 branches at end December 2020. ATMs count of the bank increased to 412 ATMs at end December 2020 from 402 ATMs a quarter ago.

Total customer base of the bank has increased to 9.08 million at end December 2020 from 8.76 million a quarter ago and 7.82 million at end December 2019

Book value per share has improved to Rs 210.5 per share at end December 2020, while adjusted book value (adjusting for proforma NNPA and 10% of restructured assets) stood at Rs 187.6 per share.

NII declines on decline in loan book: For the quarter ended December 2020, the bank has reported 2% decline in NII at Rs 908.15 crore. NIM eased to 4.20% in Q3FY2021 from 4.6% in Q3FY2019, while loan book declined 5% and credit deposit ratio dipped to 84.0% end December 2020.

The interest income fell 8% to Rs 1979.89 crore, while interest expenses dipped 13% to Rs 1071.74 crore.

Healthy non-interest income growth: The non-interest income of the bank increased 19% on yoy basis to Rs 579.87 crore in Q3FY2021. Core fee income improved 5% to Rs 497 crore, while trading income zoomed 539% to Rs 83 crore in Q3FY2021.

Net total income of the bank increased 6% to Rs 1488.02 crore in Q3FY2021.

Expense ratio dips: The operating expenses of bank have rose 1% to Rs 683.21 crore. The other operating expenses declined 3% to Rs 472.51 crore, while employee cost increased 12% to Rs 210.70 crore. The expense ratio eased 224 bps qoq and 215 bps yoy to 45.9% in Q3FY2021.

The operating profit of the bank galloped 10% to Rs 804.81 crore in quarter ended December 2020.

Provisions rises: Provisions and contingencies declined 4% to Rs 609.76 crore for Q3FY2021.

Profit before tax increased 108% to Rs 195.05 crore in Q3FY2021. The effective tax rate eased 89 bps yoy to 24.6%. Net Profit increased 110% to Rs 147.06 crore in quarter ended December 2020.

Financial Performance 9MFY2020:

For the nine-months ended December 2020 (9MFY2020), the bank has posted 11% increase in net profit to Rs 432.44 crore. The net interest income improved 10% to Rs 2881.52 crore, while non-interest income declined 3% to Rs 1369.41 crore in 9MFY2020. The expense ratio improved 265 bps to 47.9% in 9MFY2020 compared to 50.6% in 9MFY2019. The operating expenses were flat at Rs 2036.64 crore, while provision and contingencies jumped 18% to Rs 1635.49 crore. The profit before tax declined 4% to Rs 578.80 crore in 9MFY2020. An effective tax rate has declined to 25.3% in 9MFY2020 from 35.0% in 9MFY2019. The net profit increased 11% to Rs 432.44 crore in 9MFY2020.