Highlights:

The bank profitability, growth and asset quality has been above expectations. The bank has targeted loan growth of 15%, while the loan growth is higher at 16% which is inclusive across all sector and the bank expect the trends to continue driven by busy and festival season along with structural economic changes undertaken.

The bank has recorded the highest ever net profit in the quarter ended September 2022

The bank has been accelerated deposit growth to 13% from 4% quarter ago. The bank has also raised term deposit rates by 70 bps in August and September 2022.

The demand deposits grew 15% and saving accounts by 11%. The bank has continued customer acquisition and it is targeting 15% deposit growth for FY23.

The NIM has improved to 4.07% in Q2FY2023 and the bank is targeting to maintain the NIM above 3.8%.

The bank has maintained cost of funds steady at 4.08% despite rise in term deposit rate compensated by increase in share of low cost deposits.

The bank has improved yield on advanced to 8.55% and expects to continue to rise ahead.

About 85% of the loan book is floating rate basis, of which 52% is MCLR linked and 32% is EBLR linked.

The bank has maintained stable employee cost on account of decline in AS 15 provision with increasing interest rate. However, the bank expects the cost of employees to go up by 10% ahead on account of increase in DII and increased number of employees.

The bank has added 295 new employees in the sales during the quarter ended September 2022.

The bank aims to maintain cost to income ratio around 50% going forward.

The bank has improved the ratio of operating profit to asset to 2.64% and expect maintain the number going forward.

The bank has recorded credit cost at 0.33% for Q2 and 0.56% for H1FY2022. The bank is targeting the credit cost of below 1% for FY2023. It has front loaded the provisions to H1 for tax planning and better balance sheet management.

The bank has recorded RoA of 1.16% in Q2FY2023. The bank has targeted RoA of 1.2% by March 2023 quarter, while the bank is confident of comfortably crossing the guidance.

The capital adequacy ratio is healthy at 18.3% and liquidity coverage ratio is 200%.

The bank has witnessed fresh slippages of Rs 131 crore which is below 1% annualized. The bank has continued to record higher NPA reductions above fresh slippages for fifth straight quarter.

The bank has conducted significant write-off of loans of Rs 576 crore. There is no sale of bad loans during the quarter.

The SMA 2 loan book stands below 1% at Rs 411 crore, of which gold loans stands at Rs 41 crore.

The bank aims to reduce gross NPA ratio below of 3% by March 2023 from existing 3.97% and net NPA ratio below 1% from 1.36%.

The restructured loan book of the bank has declined to Rs 1231 crore end September 2022 from Rs 1640 crore end September 222. The bank expects 5% of restructured loans to slip to NPA category.

The bank is holding provisions of Rs 114 crore against standard restructured loan book.

The bank has tie-ups with 2 leading NBFCs for co-lending and plans to add two more NBFCs.

The bank also plans to add 3 more fintech partners for customer acquisition.

The bank aims to improve CASA deposit ratio to 40% and planning various steps to achieve the same. The bank has done recruitment of staff from market place for driving this.

The bank has open retail branch at the Hyderabad to just focus on the retail assets and plans to add 18 such branches.