Highlights:

The bank has posted 16% growth in the operating profit up Rs 3288 crore from Rs 2846 crore. Net Profit increased 34% to Rs 690 crore in Q3FY2022.

The bank has posted 36% jump in the non-interest income supported by fee Income growth of 11%. Growth in forex income was at 32%, PSLC commission was at 47% and recovery in bad debts was at 111%.

Operating Expenses showed marginal increase of 2%, almost flat.

The business volume of the bank has increased 6% driven by deposits growth of 8% and advances growth of 3%.

CASA Deposits grew by 10% and CASA ratio improved by 80 bps YoY to 42% end December 2021.

Within the loan book, RAM Sector grew by 11% gaining share to 61%.

Retail loans grew by 13%, backed by growth in housing loan by 11%, personal loan by 36%, jewel loan by 43%, auto loan by 6% and other retail loans by 11%.

Agriculture loan grew by 14% on the back of increase of jewel loan by 24%, nvestment credit by 30%, agri allied by 72% and SHG by 16%.

The MSME loan book moved up by 6%.

The bank is targeting loan growth of 8-10% for the current year. The bank has recorded loan approvals of Rs 22000 crore in Q3FY2022 and Rs 46000 crore in 9MFY2022, most of which is term loans.

The bank has identified 34 account with the exposure of Rs 5500 crore for transfer to bad Bank of which 8 accounts with the exposure of Rs 1900 crore were to be transferred in the first phase. However, three accounts have achieved resolution so balance 5 account with the exposure of Rs 1200 crore will be transferred to bad Bank in the first phase.

In the second phase, 9 accounts with the exposure of Rs 1300 crore are proposed to be transferred to bad Bank.

The restructure loan book of the bank stands at Rs 20000 crore of which retail stands at Rs 8000 crore MSME at Rs 8000 crore, corporate at Rs 3000 crore and agriculture at Rs 1000 crore.

The corporate slippages stood at Rs 956 crore of which Rs 400 crore came from two accounts which were classified as standard account earlier due to court order and currently classified as NPA.

The bank has created 100% provisions for its exposure to SREI account with additional provisions created in the current quarter, which have led overall increase in provisions.

The bank has created 15% provisions on exposure to account in the large retail chain segment – Future Retail with the exposure of Rs 900 crore.

The company has created tax provisions relating to the dispute leading to higher tax provision in Q3FY2022. However, bank expects the tax provision reversals to continue from next quarter on account of accumulated losses.

Credit cost stood at 2.3%, while credit cost excluding high provisioning for particular accounts stood at 1.6%. The bank expect current cost normalize ahead.

The bank expects credit costs to be below 2% for FY23.

The bank had exposure of Rs 225 crore to Air India, which has been repaired.

The bank expects its gross and net NPA continue to moderate ahead on qoq basis.

The bank proposes to improve Casa ratio to 44-45% in next 12-18 months.

The outstanding exposure under ECLGS scheme stands at Rs 8760 crore with additional disbursements of Rs 2360 crore in Q3FY2022.

The share of digital transactions has increased to 76%.

As per the bank about 42% of the total loan book is external benchmark lending rate linked and 48% of the book is linked to marginal cost of funds-based lending rate.

The recoveries for FY2023 are likely to be similar to FY2022 levels.