Asset quality weakens: Bank has witnessed moderation in asset quality in the quarter ended December 2015 with the surge in fresh slippages of advances.

• Fresh slippages of advances jumped to Rs 379.71 crore in Q3FY2016 from Rs 149.29 crore in the previous quarter
• Meanwhile, the recoveries, upgradations and write-off stood at Rs 237.42 crore for the quarter.
• Outstanding standard restructured advances of the bank eased to Rs 1836.00 crore (5.58% of advances) at end December 2015 compared to Rs 1846.00 crore (5.69% of advances) at end September 2015.
• Stressed assets (NNPA and restructured advances) increased to 7.98% of advances at end December 2015 from 7.65% at end September 2015 and 7.82% at end December 2014.
• RWA increased 9% to Rs 33704 crore at end of December 2015 from a year earlier.

Stable business growth: Business of the bank increased at stable pace of 10% yoy to Rs 82592 crore at end December 2015. Deposits increased 11% to Rs 49664 crore, while advances also moved up 9% to Rs 32928 crore at end December 2015.

Credit-deposit ratio eased marginally to 66.3% at end December 2015 from 66.4% at end September 2015.

CASA ratio improves: CASA deposits increased 17% to Rs 12529 crore way ahead of overall deposits growth. CASA ratio improved to 25.2% at end December 2015, compared with 24.3% at end September 2015 and 24.0% at end December 2014.

Meanwhile, bank has sharply reduced bulk deposits by 6% yoy to mere Rs 158 crore at end December 2015.

Retail loans gains share in loan book: Advances rose 9% at Rs 32928 crore at end December 2015. The corporate advance rose 4% to Rs 15937 crore, while the retail advance galloped 14% to Rs 16991 crore at end December 2015. Retail advances gained share to 51.6% at end December 2015 from 49.3% at end December 2014.

* Break-up of advances shows housing at 12.4% of the advances, agriculture – 12.7%, SME – 23.2%, medium enterprises – 4.0%, large enterprises – 14.7%, other personal loans – 5.6% and other – 27.5% at end December 2015.

* Priority sector loans (PSL) of the bank stood at 48.3% of advances at end December 2015, while consistently exceeding the regulatory PSL target of 40%, while increased from 48.0% at end September 2015 and 43.5% at end December 2014.

Investment book of the bank declined 2% to Rs 16561 crore at end December 2015. SLR investment stood at Rs 11945 crore. Share of AFS book eased to 34.9% at end December 2015 from 35.8% a quarter ago, while remained higher over 29.0% a year ago.

The modified duration of AFS book declined to 1.84 years, while that of overall investment book was nearly flat at 3.68 years at end December 2015.

Network expansion: Bank has opened 11 branches and 70 ATMs in the quarter ended December 2015. Bank has the network of 701 branches and 1170 ATMs at end December 2015.

Book value stood at Rs 196.19 per share at end December 2015. Adjusted Book value (excluding NNPA and 10% of restructured assets) was at Rs 144.50 per share at end December 2015.

NII growth slips, as NIMs decline: For the quarter ended December 2015, the bank has posted 3% growth in interest income to Rs 1237.11 crore, while interest expenses increased 4% to Rs 932.18 crore. NII rose mere 1% to Rs 304.93 crore, as net interest margin (NIM) declined to 2.34% in 9MFY2016 from 2.41% in H1FY2016.

Healthy core fee income growth: The non-interest income of the bank declined 18% to Rs 132.72 crore in Q3FY2016. The core fee income of the bank increased 18% to Rs 113 crore, but trading income dipped 70% to Rs 20 crore in Q3FY2016 over Q3FY2015.

With the sharp decline in trading income, the net total income fell 6% to Rs 437.65 crore in quarter under review.

Expense ratio improves: Operating expenses dipped 13% to Rs 245.97 crore. The employee cost plunged 40% to Rs 112.41 crore in Q3FY2016, while the other operating expenses increased 42% to Rs 133.56 crore. Expense ratio improved to 56.2% in Q3FY2016 compared with 60.6% in Q3FY2015.

The operating profit rose 5% to Rs 191.68 crore in the quarter ended December 2015.

Provisions decline: Bank has witnessed decline in provisions and contingencies to Rs 63.11 crore in Q3FY2016 as against Rs 78.89 crore in the corresponding quarter last year.

Thus, the Profit before tax (PBT) jumped 23% to Rs 128.57 crore in Q3FY2016 over Q3FY2015.

Tax provision rebound: Banks tax provisions stood at Rs 31.66 crore in Q3FY2016 against write-back of Rs 2.57 crore in Q1FY2015.

Net profit declined 9% to Rs 96.91 crore in Q3FY2016.

YTD Financial Performance:

For the nine months ended December 2015 (9MFY2016), the bank has posted 3% decline in net profit to Rs 308.50 crore. The net interest income improved 7% to Rs 943.14 crore, while non-interest income declined 13% to Rs 372.85 crore in 9MFY2016. The expense ratio dipped by 219 bps to 54.4% in 9MFY2016 compared to 56.6% in 9MFY2015. The operating expenses increased 6% to Rs 600.16 crore, while provision and contingencies fell 2% to Rs 214.03 crore. The profit before tax increased 11% to Rs 386.13 crore in 9MFY2016. After considering 20% of effective tax rate, the net profit fell 3% to Rs 308.50 crore in 9MFY2016.