On business front, the bank has maintained the business growth steady at 9% at end September 2016. Bank has been consistently improving CASA ratio to 24.9% at end September 2016. Bank has further improved its distribution network adding 13 branches and 19 ATMs in the quarter ended September 2016.

Asset quality weakens: Bank has exhibited marginal deterioration in asset quality in the quarter ended September 2016 with higher fresh restructuring of advances.

• GNPA ratio rose 50 bps on qoq basis to 2.29%, while NNPA ratio inched up 65 bps qoq to 1.44% ay end September 2016.
• Fresh restructuring of advances stood at Rs 6 crore in Q2FY2017. Outstanding standard restructured advances of the bank declined to Rs 1245 crore (3.1% of advances) at end September 2016 compared to Rs 2227 crore (5.9% of advances) at end September 2015.
• The provision coverage ratio declined sharply 68.3% at end September 2016 from 78.49% a quarter ago and 75.09% a year ago.

Business growth steady: Business of the bank rose at steady pace of 9% yoy to Rs 91539 crore at end September 2016 over September 2015. Deposits increased 11% to Rs 52002 crore, while advances rose at slower pace of 5% to Rs 39537 crore at end September 2016 over September 2015. Credit-deposit ratio declined to 76.0% at end September 2016 from 80.3% at end September 2015.

CASA ratio continues to improve: CASA deposits increased 19% to Rs 12963 crore. CASA ratio improved to 24.9% at end September 2016 from 24.3% a quarter ago and 23.4% a year ago.

Retail loans gaining share: Retail loans increased 11% to Rs 6170 crore driving the overall advances growth, while the corporate loan growth declined 3% at Rs 13114 crore. The agriculture credit rose 10% to Rs 6950 crore, and commercial loans improved 9% to Rs 13303 crore at end September 2016. The share of retails loan inched up to 15.6% at end September 2016 from 15.3% at end June 2016.

NIMs improving: Bank has recorded healthy improvement in NIMs to 3.61% in Q2FY2017 from 3.52% in the previous quarter and 3.39% in the corresponding quarter last year. An improvement in CASA ratio mainly supported NIMs rise in Q2FY2017. The yield on advances declined 38 bps yoy to 11.50% in Q2FY2017, while cost of funds dipped 66 bps yoy to 6.89% contributing to the NIM improvement.

Network expansion: Bank has opened 13 branches in the quarter ended September 2016. Bank has the network of 688 branches and 1693 ATMs at end September 2016.

Book value stood at Rs 401.1 per share at end September 2016, while adjusted Book value (excluding NNPA and 10% of restructured assets) was at Rs 344.5 per share at end September 2016.

NII rises on higher NIMs: For the quarter ended September 2016, the bank has posted 2% growth in interest income Rs 1392.92 crore, while interest expenses declined 3% to Rs 897.96 crore. NII jumped 13% to Rs 494.96 crore, supported by further improvement in NIMs.

Non-interest income rises: The non-interest income of the bank increased 6% to Rs 217.85 crore in Q2FY2017. The core fee income declined 4% to Rs 137 crore, while treasury income jumped 27% to Rs 81 crore in Q2FY2017.

Net Total income moved up 11% to Rs 712.81 crore in quarter under review.

Cost-to-income ratio rises: Operating expenses increased 37% to Rs 393.31 crore. The employee cost rose 16% to Rs 154.39 crore in Q2FY2017, while the other operating expenses increased 54% to Rs 238.92 crore. Expense ratio increased sharply to 55.2% in Q2FY2017 from 44.8% in Q2FY2016, causing 10% in the operating profit to Rs 319.50 crore in the quarter ended September 2016.

Provisions decline: Provisions and contingencies declined 5% to Rs 119.19 crore in Q2FY2017 as against Rs 126.02 crore in the corresponding quarter last year. NPA provisions fell 4% to Rs 96 crore, while bank has written back standard asset provisions of Rs 3 crore in Q2FY2017. Bank has made provision of Rs 18 crore for investment depreciation and other provisions of Rs 8 crore.

The Profit before tax (PBT) declined 13% to Rs 200.31 crore in Q2FY2017 from Rs 229.22 crore Q2FY2016.

Tax provision ease: Banks tax provisions stood at Rs 74.00 crore in Q2FY2017 against Rs 87.00 crore in Q2FY2016. The net profit declined 11% to Rs 126.31 crore in Q2FY2017.

Half Yearly Financial Performance:

For the half year ended September 2016 (H1FY2017), the bank has posted 1% decline in net profit to Rs 272.66 crore. The net interest income improved 13% to Rs 976.08 crore, while non-interest income moved up 3% to Rs 380.13 crore in H1FY2017. The expense ratio jumped by 857 bps to 55.6% in H1FY2017 compared to 47.0% in H1FY2016. The operating expenses increased 31% to Rs 753.69 crore, while provision and contingencies declined 24% to Rs 186.11 crore. The profit before tax rose 2% to Rs 416.41 crore in H1FY2017. Tax provisions increased to Rs 143.75 crore in H1FY2017 against Rs 130.50 crore in Y2015. Net profit declined 1% to Rs 276.80 crore in H1FY2017.